Kevin Brady on Tax Reform Republican Representative (TX-8)

Voted NO on extending AMT exemptions to avoid hitting middle-income.

1. increase and extend through 2008 the alternative minimum tax (AMT) exemption amounts;
2. extend through 2008 the offset of personal tax credits against AMT tax liabilities;
3. treat net income and loss from an investment services partnership interest as ordinary income and loss;
4. deny major integrated oil companies a tax deduction for income attributable to domestic production of oil or gas.

The AMT sets a minimum tax rate of 26% or 28% on some taxpayers so that they cannot use certain types of deductions to lower their tax. By contrast, the rate for a corporation is 20%. Affected taxpayers are those who have what are known as "tax preference items". These include long-term capital gains, accelerated depreciation, & percentage depletion.

Because the AMT is not indexed to inflation, an increasing number of upper-middle-income taxpayers have been finding themselves subject to this tax. In 2006, an IRS report highlighted the AMT as the single most serious problem with the tax code.

For 2007, the AMT Exemption was not fully phased until [income reaches] $415,000 for joint returns. Within the $150,000 to $415,000 range, AMT liability typically increases as income increases above $150,000.

OnTheIssues.org Explanation: This vote extends the AMT exemption, and hence avoids the AMT affecting more upper-middle-income people. This vote has no permanent effect on the AMT, although voting YES implies that one would support the same permanent AMT change.

Voted NO on paying for AMT relief by closing offshore business loopholes.

Proponents support voting YES because:

Rep. RANGEL: We have the opportunity to provide relief to upward of some 25 million people from being hit by a $50 billion tax increase, which it was never thought could happen to these people. Almost apart from this, we have an opportunity to close a very unfair tax provision, that certainly no one has come to me to defend, which prevents a handful of people from having unlimited funds being shipped overseas under deferred compensation and escaping liability. Nobody, liberal or conservative, believes that these AMT taxpayers should be hit by a tax that we didn't intend. But also, no one has the guts to defend the offshore deferred compensation. So what is the problem?

Opponents recommend voting NO because:

Rep. McCRERY: This is a bill that would patch the AMT, and then increase other taxes for the patch costs. Republicans are for patching the AMT. Where we differ is over the question of whether we need to pay for the patch by raising other taxes. The President's budget includes a 1-year patch on the AMT without a pay-for. That is what the Senate passed by a rather large vote very recently, 88-5. The President has said he won't sign the bill that is before us today. Republicans have argued against applying PAYGO to the AMT patch. In many ways PAYGO has shown itself to be a farce.

Voted YES on retaining reduced taxes on capital gains & dividends.

• Decreasing the number of people that will be required to pay the Alternative Minimum Tax (AMT)
• Allowing for deductions of state and local general sales taxes through 2007 instead of 2006
• Lengthening tax credits for research expenses
• Increasing the age limit for eligibility for food stamp recipients from 25 to 35 years
• Continuing reduced tax rates of 15% and 5% on capital gains and dividends through 2010
• Extending through 2007 the expense allowances for environmental remediation costs (the cost of cleanup of sites where petroleum products have been released or disposed)

Voted YES on providing tax relief and simplification.

• Extension of Family Tax Provisions
• Repeals the scheduled reduction (15 to 10 percent) for taxable years beginning before January 1, 2005, of the refundability of the child tax credit.
• Extends through 2005 the increased exemption from the alternative minimum tax for individual taxpayers.
• Extends through 2005 the following expiring tax provisions:
  1. the tax credit for increasing research activities;
  2. the work opportunity tax credit;
  3. the welfare-to-work tax credit;
  4. the authority for issuance of qualified zone academy bonds;
  5. the charitable deduction for donations by corporations of computer technology and equipment used for educational purposes;
  6. the tax deduction for certain expenses of elementary and secondary school teachers;
  7. the expensing of environmental remediation costs;
  8. the designation of a District of Columbia enterprise zone

Voted YES on making permanent an increase in the child tax credit.

Voted YES on permanently eliminating the marriage penalty.

Voted YES on making the Bush tax cuts permanent.

Voted YES on $99 B economic stimulus: capital gains & income tax cuts.

The bill would allow more individuals to receive immediate $300 refunds, and lower the capital gains tax rate from 20% to 18%.

Voted YES on Tax cut package of $958 B over 10 years.

Voted YES on eliminating the Estate Tax ("death tax").

Voted YES on eliminating the "marriage penalty".

Voted YES on $46 billion in tax cuts for small business.

Phaseout the death tax.

Title: To amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period.

Summary: Repeals, effective January 1, 2011, current provisions relating to the basis of property acquired from a decedent. Provides with respect to property acquired from a decedent dying on January 1, 2011, or later that:
1. property shall be treated as transferred by gift; and

2. the basis of the person acquiring the property shall be the lesser of the adjusted basis of the decedent or the fair market value of the property at the date of the decedent's death.

3. Requires specified information to be reported concerning non-cash assets over $1.3 million transferred at death and certain gifts exceeding $25,000.

4. Makes the exclusion of gain on the sale of a principal residence available to heirs.

5. Revises current provisions concerning the transfer of farm real to provide that gain on such exchange shall be recognized to the estate only to the extent that the fair market value of such property exceeds such value on the date of death.

6. Provides a similar rule for certain trusts.

7. Amends the special rules for allocation of the generation-skipping tax (GST) exemption to provide that if any individual makes an indirect skip during such individual's lifetime, any unused portion of such individual's GST exemption shall be allocated to the property transferred to the extent necessary to make the inclusion ratio for such property zero; and

8. if the amount of the indirect skip exceeds such unused portion, the entire unused portion shall be allocated to the property transferred.

9. Provides that, if an allocation of the GST exemption to any transfers of property is deemed to have been made at the close of an estate tax inclusion period, the value of the property shall be its value at such time.

Abolish IRS--replace income tax with national sales tax.

A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States. The Fair Tax Act of 2003 amends the Internal Revenue Code to repeal subtitle A (Income Taxes), B (Estate and Gift Taxes), and C (Employment Taxes) of the Internal Revenue Code. Imposes a tax on the use or consumption of taxable property or services. Sets the tax rate at 23 percent for the calendar year 2005. Sets the rate, for years after 2005, at the combined sum of the general revenue rate (14.91 percent), the old-age survivors and disability rate, and the hospital insurance rate. Senate bill S.1493 is identical to House bill HR.25.

Rated 64% by NTU, indicating "Satisfactory" on tax votes.

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.

Rated 0% by the CTJ, indicating opposition to progressive taxation.

OnTheIssues.org interprets the 2005-2006 CTJ scores as follows:

• 0% - 20%: opposes progressive taxation (approx. 235 members)
• 21% - 79%: mixed record on progressive taxation (approx. 39 members)
• 80%-100%: favors progressive taxation (approx. 190 members)

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:

• Fair taxes for middle and low-income families
• Requiring the wealthy to pay their fair share
• Closing corporate tax loopholes
• Adequately funding important government services
• Reducing the federal debt
• Taxation that minimizes distortion of economic markets

Replace income tax & employment tax with FairTax.

• Repeals the income tax, employment tax, and estate and gift tax.
• Imposes a national sales tax on the use or consumption in the United States of taxable property or services.
• Sets the sales tax rate at 23% in 2011, with adjustments to the rate in subsequent years.
• Allows exemptions from the tax for property or services purchased for business, export, or investment purposes, and for state government functions.
• Prohibits the funding of the Internal Revenue Service (IRS) after FY2013.
• Establishes in the Department of the Treasury: (1) an Excise Tax Bureau to administer excise taxes not administered by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); and (2) a Sales Tax Bureau to administer the national sales tax.
• Terminates the sales tax imposed by this Act if the Sixteenth Amendment to the U.S. Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this Act.

Taxpayer Protection Pledge: no new taxes.

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.

Member of House Ways and Means Committee.

The Committee of Ways and Means is the chief tax-writing committee of the United States House of Representatives. Members of the Ways and Means Committee cannot serve on any other House Committees, though they can apply for a waiver from their party's congressional leadership. The Committee has jurisdiction over all taxation, tariffs and other revenue-raising measures, as well as a number of other programs including:

• Social Security
• Unemployment benefits
• Medicare
• Enforcement of child support laws
• Temporary Assistance for Needy Families, a federal welfare program
• Foster care and adoption programs

Supports the Taxpayer Protection Pledge.

[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."

Replace income tax and IRS with FairTax.

Congressional Summary: This bill imposes a national sales tax in lieu of the current income and corporate income tax, employment taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2017, with adjustments in subsequent years. U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon family size and poverty guidelines. No funding is allowed for the operations of the Internal Revenue Service after FY2019. Finally, the FairTax terminates if the 16th Amendment to the Constitution (authorizing an income tax) is not repealed within 7 years.

Supporters reasons for voting YEA: Rep. MORAN: I am all on board on tax reform, but the best solution is not tinkering with the current system; it is an overhaul of the current Tax Code. The FairTax, in my view, brings two goals front and center: to pass on to the next generation of Americans the freedoms and liberties guaranteed by our Constitution, and the opportunity for every American to live the American dream.

Opponents reasons for voting NAY: (by FairTaxWarrior.com):

• Criticisms from The Left
  • The FairTax rate is really 30%, not the 23% proponents say.
  • It's an additional national sales tax.
  • It's really just a windfall tax cut for the rich.
  • A sales tax is regressive, and punishes the poor unfairly.
  • It's just a scheme to let corporations escape paying taxes.
• Criticisms from The Right:
  • The FairTax does nothing to cut government spending.
  • The 23% rate is too high.
  • It 's the largest welfare increase in history [via the Family Consumption Allowance]
• General criticisms
  • The FairTax will negatively impact the housing market [by removing the mortgage deduction].
  • Black market activity will increase.
  • The IRS won't really be abolished.
  • The Flat (Income) Tax is a better option.
  • It will be a nightmare to transition to The FairTax from an Income Tax.

Death Tax is a pernicious double tax.

Heritage Action Summary: This bill would repeal the estate and generation-skipping transfer taxes, as well as cut the top gift tax rate.

Heritage Foundation recommendation to vote YES: (4/16/2015): Collectively, these measures repeal the pernicious double tax known as the "death tax," and result in a tax cut of $269 billion over 10 years. The death tax hurts economic growth and therefore limits the ability of Americans to prosper. Repealing the death tax would generate an average of 18,000 jobs annually and increase the overall net worth of American households by $300 billion a year. The federal government should encourage, not punish, Americans who work and pay taxes their whole lives, save enough to support themselves through retirement, and retain the ability to fulfill the American Dream by passing along a better life to their children.

Secretary of Labor Robert Reich recommendation to vote YES: (robertreich.org 6/4/2015): At a time of historic economic inequality, it should be a no-brainer to raise a tax on inherited wealth for the very rich. Yet there's a move among some members of Congress to abolish it altogether. Today the estate tax reaches only the richest 2/10 of 1%, and applies only to dollars in excess of $10.86 million for married couples or $5.43 million for individuals. That means if a couple leaves to their heirs $10,860,001, they now pay the estate tax on $1. The current estate tax rate is 40%, so that would be 40 cents. Yet according to these members of Congress, that's still too much. Our democracy's Founding Fathers did not want a privileged aristocracy. Yet that's the direction we're going in. The tax on inherited wealth is one of the major bulwarks against it. That tax should be increased and strengthened.

Legislative outcome: Passed by the House 240-179-12; never came to vote in Senate.

Simplicity & fairness: 3 tax brackets with lower top rate.

Our Challenge Our tax code is a mess, and that's putting it lightly. Multiple brackets. High rates. Special interest breaks everywhere. Rules and regulations that are too complicated to understand. It costs more and more each year just to do your taxes, let alone pay them. All of this drags people down and leaves businesses buried in paperwork and compliance problems. So instead of promoting growth, our tax code is pushing jobs overseas. And the agency charged with overseeing all of this--the IRS--has repeatedly violated the trust of the American taxpayer.

Our Vision We need a new tax code. It needs to be fair and simple for everyone. It should be so simple that most Americans can do their taxes on a form as simple as a postcard. Our tax code should be built for growth.
• Simplicity and fairness. Our plan makes the tax code simpler, fairer, and flatter, so it's easier to have peace of mind at critical moments in life.
• Consolidate the system down to three tax brackets, and lower the top individual income tax rate to 33 percent.
• Simplify tax filing for families by creating a larger standard deduction and a larger child and dependent tax credit.
• Jobs and growth. Our plan makes it easier to create jobs, raise wages, and expand opportunity for all Americans.
• Cut taxes on small businesses by creating a separate, low tax rate of 25 percent for many on Main Street.
• Cut taxes on savings and investment by allowing families and individuals to deduct 50 percent of the dividends, capital gains, and interest received from stocks and mutual funds.
• A service first IRS. Our plan matches a simpler, fairer tax code with a simpler, fairer IRS that puts taxpayers first. Clear out the bureaucracy by doing away with all the rules, regulations, forms, and instructions that won't be needed with a simpler, fairer tax code.