Ralph Moody Hall on Tax Reform Republican Representative (TX-4)

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.

50-25-25 budget formula for debt-tax cuts-spending.

The 33 member Blue Dog Coalition applauds Senator Joe Lieberman (D-CT) for his commitment to fiscal responsibility. In a floor speech today, Senator Lieberman called for a budget framework that would devote half of the budget surplus to debt reduction, a quarter of the remaining funds to tax cuts, the final quarter to targeted spending increases in America’s priority programs. Senator Lieberman touted a mantra long held by the Blue Dogs that “our top priority must remain debt reduction.”

Senator Lieberman’s position closely reflects the “50-25-25” equation for responsible budgeting long advocated by the Blue Dog Coalition. The Blue Dogs’ formula would extract the Social Security and Medicare Trust Funds from the projected budget surplus and use half of the remaining funds to pay down the national debt. After committing 50 percent to debt reduction, 25 percent would be allocated to tax cuts and the remaining 25 percent would fund increases in priority programs, such as education, agriculture, defense, and health care. “The 50-25-25 budget framework is a common sense, fiscally conservative approach that will provide for a healthy economy, lower taxes, and reduction of our national debt. I am pleased that Senator Lieberman stressed the need for fiscal discipline,” said Blue Dog Budget Task Force Co-Chairman, Rep. Dennis Moore (D-KS).

“Senator Lieberman got it exactly right,” said Blue Dog Co-Chairman Rep. Jim Turner (D-TX). “We need a budget that meets our commitments and lives up to our responsibilities. Most importantly, we need a budget that adds up. The 50-25-25 framework is a smart, conservative, approach that prioritizes paying down the debt and still leaves room for real tax relief.”

Reduce the capital gains tax .

Amend the Internal Revenue Code of 1986 to provide maximum rates of tax on capital gains of 15 percent for individuals and 28 percent for corporations and to index the basis of assets of individuals for purposes of determining gains and losses.

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 42% 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

Repeal the Death Tax.

A BILL to repeal the Federal estate and gift taxes:
• Subtitle B of the Internal Revenue Code of 1986 (relating to estate, gift, and generation-skipping taxes) is hereby repealed.
• The repeal shall apply to estates of decedents dying, gifts made, and generation-skipping transfers made after the date of the enactment of this Act.

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.

Adopt a single-rate tax system.

The Contract from America, clause 4. Enact Fundamental Tax Reform:

Adopt a simple and fair single-rate tax system by scrapping the internal revenue code and replacing it with one that is no longer than 4,543 words--the length of the original Constitution.

Repeal tax hikes in capital gains and death tax.

The Contract from America, clause 10. Stop the Tax Hikes:

Permanently repeal all tax hikes, including those to the income, capital gains, and death taxes, currently scheduled to begin in 2011.

No European-style VAT (value-added tax).

RESOLUTION Opposing the imposition of a value-added tax:
• Whereas a value-added tax (VAT) is a type of sales tax that is assessed on goods at every stage of production;
• Whereas a VAT is a hidden tax that is ultimately passed along to consumers, but is embedded into the price of goods and services and therefore not transparent to the consumer;
• Whereas the average tax burden levied by the Federal Government since 1980 has been 18% of GDP;
• Whereas, within the next 15 years, Federal taxes are projected to rise to the highest level in US history;
• Whereas adding a VAT on top of the existing Federal income tax would increase the burden on United States taxpayers to unprecedented levels;
• Whereas the average VAT rate in Europe has risen from 5% when the tax was first introduced in the 1960s to 20% today;
• Whereas European countries that have imposed a VAT have seen their total tax burden rise to an average of over 40% of GDP;
• Whereas such high levels of taxation and spending crowd out private investment, which stifles economic growth and leads to chronically high levels of unemployment;
• Whereas the IRS has calculated that US taxpayers spend approximately $200 billion and 7.6 billion hours a year to comply with Federal tax laws;
• Whereas a VAT would only add another layer of complexity and compliance costs to a fundamentally unsound tax system;
• Whereas the burden of a VAT would fall most heavily on low-income and middle-class Americans; and
• Whereas a VAT would do nothing to restore fiscal accountability in Washington, but would simply bankroll wasteful and inefficient Federal Government spending:
• Now, therefore, be it Resolved, That--
• It is the sense of the House of Representatives that imposing a value-added tax would be a massive tax increase that would cripple families on fixed income and only further push back the US economic recovery; and
• the House of Representatives opposes a value-added tax.

Permanently repeal the estate tax.

Congressional Summary:

• H.R.143: Effective for estates of decedents dying after December 31, 2010, chapter 11 of subtitle B of the Internal Revenue Code of 1986 is repealed.
• H.R.177: Subtitle B of the Internal Revenue Code of 1986 (relating to estate, gift, and generation-skipping taxes) is hereby repealed.

OnTheIssues Explanation: At the end of 2010, the temporary one-year suspension of the estate tax ended. This bill proposes to make it permanent, with zero exemption. The "exemption" means the amount one can inherit without taxation. In 2009 the rate was 45% and the exemption amount was $3.5 million. On January 1, 2010 a "one year repeal" of the tax was effectuated by a temporary, one-year-only rate of 0%. On January 1, 2011 the estate tax is scheduled to a top rate of 35% and the exemption amount is scheduled to be $5 million, or $10 million for married couples.

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."

Repeal the death tax, immediately and with no expiration.

Repeals the federal estate, gift, and generation-skipping transfer taxes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

• Subtitle B of the Internal Revenue Code of 1986 (relating to estate, gift, and generation-skipping taxes) is hereby repealed.
• The repeal shall apply to estates of decedents dying, gifts made, and generation-skipping transfers made after the date of the enactment of this Act.