Tim Johnson on Tax Reform
Democratic Sr Senator (SD)
SUPPORTER'S ARGUMENT FOR VOTING YES:Sen. SANDERS: The wealthiest people in the country have not had it so good since the 1920s. Their incomes are soaring, while at the same time the middle class is shrinking, and we have by far the highest rate of childhood poverty of any major country. The time is now to begin changing our national priorities and moving this country in a different direction.
This amendment restores the top income tax bracket for households earning more than $1 million a year, it raises $32.5 billion over 3 years, and invests that in our kids, including $10 billion for special education. OPPONENT'S ARGUMENT FOR VOTING NO:Sen. KYL: The problem is we are spending the same dollar 3 or 4 times, it appears. The Sanders amendment is paid for by raising taxes another $32.5 billion, ostensibly from the rich; that is to say, by raising taxes on people who make over $1 million a year. Here is the problem with that. The budget on the floor already assumes the expiration of the current tax rates; that is to say, the rates on the highest level go from 35% to 39.6%, and that money is spent. If you took all the top-rate income, you would come up with $25 billion a year, not even enough to meet what is here, and that money has already been spent. The reality is somewhere or other, somehow, more taxes would have to be raised. I don't think the American people want to do that, particularly in the current environment. LEGISLATIVE OUTCOME:Amendment rejected, 43-55
SUPPORTER'S ARGUMENT FOR VOTING YES:Sen. GRASSLEY: The Senate voted to make sure that middle-class America didn't pay the AMT, and we did it without an offset, by a vote of [about 95%]. So here we are again with an opportunity to say to middle-class America that we are not going to tax the people who were not supposed to be hit by the AMT. This amendment gives us an opportunity to get over that hurdle that is in this budget resolution that, under pay-go, you would have to have an offset for the AMT. Unless my amendment is adopted, the 25 million families who will be hit by the AMT increase will get a tax increase of over $2,000 apiece. They deserve a guarantee of relief.OPPONENT'S ARGUMENT FOR VOTING NO: Sen. CONRAD: If you want to blow a hole in the budget as big as all outdoors, here is your opportunity--a trillion dollars not paid for, a trillion dollars that we are going to go out and borrow from the Chinese and Japanese. That makes absolutely no sense. I urge my colleagues to vote no.LEGISLATIVE OUTCOME:Amendment rejected, 47-51
SUPPORTER'S ARGUMENT FOR VOTING YES:Sen. KYL: This amendment is a reprise of what we did last year in offering to reform the estate tax, sometimes referred to as the death tax. Now, in the budget itself, there is a provision to allow the death tax to be changed from the current law to a top rate of 45% and an exempted amount of $3.5 million, and there are some other features. My amendment would reduce that top rate to no higher than 35% so that if you had more than one rate, at least the top rate could not exceed 35%, and both of the two spouses would have a $5 million exempted amount before the estate tax would kick in. Now, the reason for my amendment is: current law [is] getting up to a high rate of 55% and an exempted amount of either $2 million or $1 million, probably $1 million--a continued unfair burden on primarily America's small businesses and farms.
OPPONENT'S ARGUMENT FOR VOTING NO:Sen. CONRAD: This amendment would virtually eliminate the estate tax. Let me say why. Let me first say there is no death tax in the country. Of course, if you poll people and you ask them: Do you want to eliminate the death tax? they will say sure. But you are not going to pay any tax when you die unless you have $2 million. There is no death tax in America. There is a tax on estates. At today's level of $2 million, that affects only 0.5% of estates. When the exemption reaches $3.5 million in 2009, 0.2% of estates will be taxed. If the amendment is agreed to, we would be borrowing money in the name of 99.8% of the American people, borrowing primarily from China & Japan, to give it to the Warren Buffets, the Paris Hiltons, & others of enormous wealth in this country.
LEGISLATIVE OUTCOME:Amendment rejected, 50-50
Proponents recommend voting YES because:
The permanent solution to the death tax challenge that we have today is a compromise. It is a compromise that prevents the death rate from escalating to 55% and the exclusion dropping to $1 million in 2011. It also includes a minimum wage increase, 40% over the next 3 years. Voting YES is a vote for that permanent death tax relief. Voting YES is for that extension of tax relief. Voting YES is for that 40% minimum wage increase. This gives us the opportunity to address an issue that will affect the typical American family, farmers, & small business owners.
Opponents recommend voting NO because:
Family businesses and family farms should not be broken up to pay taxes. With the booming economy of the 1990s, many more Americans joined the ranks of those who could face estate taxes. Raising the exemption level and lowering the rate in past legislation made sense. Under current law, in my State of Delaware, fewer than 50 families will face any estate tax in 2009. I oppose this legislation's complete repeal of the estate tax because it will cost us $750 billion. Given the world we live in today, with clear domestic needs unmet, full repeal is a luxury that we cannot afford.
To add insult to this injury, the first pay raise for minimum wage workers in 10 years is now hostage to this estate tax cut. We are told that to get those folks on minimum wage a raise, we have to go into debt, so that the sons and daughters of the 7,000 most fortunate families among us will be spared the estate tax. We must say no to this transparent gimmick.
Every year National Taxpayers Union (NTU) rates U.S. Representatives and Senators on their actual votes—every vote that significantly affects taxes, spending, debt, and regulatory burdens on consumers and taxpayers. NTU assigned weights to the votes, reflecting the importance of each vote’s effect. NTU has no partisan axe to grind. All Members of Congress are treated the same regardless of political affiliation. Our only constituency is the overburdened American taxpayer. Grades are given impartially, based on the Taxpayer Score. The Taxpayer Score measures the strength of support for reducing spending and regulation and opposing higher taxes. In general, a higher score is better because it means a Member of Congress voted to lessen or limit the burden on taxpayers. The Taxpayer Score can range between zero and 100. We do not expect anyone to score a 100, nor has any legislator ever scored a perfect 100 in the multi-year history of the comprehensive NTU scoring system. A high score does not mean that the Member of Congress was opposed to all spending or all programs. High-scoring Members have indicated that they would vote for many programs if the amount of spending were lower. A Member who wants to increase spending on some programs can achieve a high score if he or she votes for offsetting cuts in other programs. A zero score would indicate that the Member of Congress approved every spending proposal and opposed every pro-taxpayer reform.
OnTheIssues.org interprets the 2005-2006 CTJ scores as follows:
Citizens for Tax Justice, founded in 1979, is not-for-profit public interest research and advocacy organization focusing on federal, state and local tax policies and their impact upon our nation. CTJ's mission is to give ordinary people a greater voice in the development of tax laws. Against the armies of special interest lobbyists for corporations and the wealthy, CTJ fights for:
Politicians often run for office saying they won't raise taxes, but then quickly turn their backs on the taxpayer. The idea of the Pledge is simple enough: Make them put their no-new-taxes rhetoric in writing.
In the Taxpayer Protection Pledge, candidates and incumbents solemnly bind themselves to oppose any and all tax increases. While ATR has the role of promoting and monitoring the Pledge, the Taxpayer Protection Pledge is actually made to a candidate's constituents, who are entitled to know where candidates stand before sending them to the capitol. Since the Pledge is a prerequisite for many voters, it is considered binding as long as an individual holds the office for which he or she signed the Pledge.
Since its rollout with the endorsement of President Reagan in 1986, the pledge has become de rigeur for Republicans seeking office, and is a necessity for Democrats running in Republican districts.
[The ATR, Americans for Tax Reform, run by conservative lobbyist Grover Norquist, ask legislators to sign the Taxpayer Protection Pledge in each election cycle. Their self-description:]
In the Taxpayer Protection Pledge, candidates and incumbents solemnly bind themselves to oppose any and all tax increases. Since its rollout in 1986, the pledge has become de rigeur for Republicans seeking office, and is a necessity for Democrats running in Republican districts. Today the Taxpayer Protection Pledge is offered to every candidate for state office and to all incumbents. More than 1,100 state officeholders, from state representative to governor, have signed the Pledge.
The Taxpayer Protection Pledge: "I pledge to the taxpayers of my district and to the American people that I will: ONE, oppose any and all efforts to increase the marginal income tax rate for individuals and business; and TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates."
Opponents' Opinion (from wikipedia.com):In Nov. 2011, Sen. Harry Reid (D-NV) claimed that Congressional Republicans "are being led like puppets by Grover Norquist. They're giving speeches that we should compromise on our deficit, but never do they compromise on Grover Norquist. He is their leader." Since Norquist's pledge binds signatories to opposing deficit reduction agreements that include any element of increased tax revenue, some Republican deficit hawks now retired from office have stated that Norquist has become an obstacle to deficit reduction. Former Republican Senator Alan Simpson, co-chairman of the National Commission on Fiscal Responsibility and Reform, has been particularly critical, describing Norquist's position as "no taxes, under any situation, even if your country goes to hell."
Not only has the Republican-led Congress achieved a balanced budget for the first time since 1969, but it has also created a budget surplus -- a feat not previously even imaginable. It is currently projected that the Fiscal Year 1999 budget surplus will be along the order of some $80 billion, of which $66 billion is earmarked for Social Security. This envious state of affairs would seem to indicate that equitable, far-reaching tax reductions may be in order -- not as an ideological or political strategy, but as a primary element of an economic growth policy and a legitimate tool for holding down unnecessary government growth in times of surplus.
The United States is enjoying steady economic prosperity thanks in no small measure to prudent fiscal policies implemented by the Republican-led Congress. However, we must look not only at the positive side of the economy but also at the problems the economy faces -- at the present time and into the twenty-first century. Limiting government spending (i.e., spending caps) is a good beginning to address some difficulties. In addition, current and future Congresses should maintain a balanced federal budget, pay down the national debt (which will help protect Social Security for current and future generations), redefine the federal government's role in the society and, finally, think about fair tax reductions for the American people and the businesses that drive our economy. [We need] an evaluation of implementing tax cuts based on their social fairness.
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AK: Begich(D) vs.Miller(R) vs.Treadwell(R) vs.Sullivan(R)
AR: Pryor(D) vs.Cotton(R) vs.Swaney(G) vs.LaFrance(L)
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