Participants: Ted Cruz, Ben Carson, Marco Rubio, Rand Paul, Donald Trump, John Kasich, Jeb Bush and Carly Fiorina
NOTE: Kiddie table debate begins at 7pm and includes the following candidates: Chris Christie, Mike Huckabee, Rick Santorum and Bobby Jindal
Click HERE to purchase Dr. Carson’s book ‘A More Perfect Union: What We The People Can Do To Reclaim Our Constitutional Liberties’.
The federal government took in a record of approximately $3,248,723,000,000 in taxes in fiscal 2015 (which ended on Sept. 30), according to the Monthly Treasury Statement released today.
That equaled approximately $21,833 for every person in the country who had either a full-time or part-time job in September.
It is also up about $212,927,100,000 in constant 2015 dollars from the $3,035,795,900,000 in revenue (in 2015 dollars) that the Treasury raked in during fiscal 2014.
Even as the Treasury was hauling in a record $3,248,723,000,000 in tax revenues in fiscal 2015, the federal government was spending $3,687,622,000,000. So, the federal government ran a deficit of $438,899,000,000 for the fiscal year.
According to the Bureau of Labor Statistics, total seasonally adjusted employment in the United States in September (including both full and part-time workers) was 148,800,000. That means that the federal tax haul for fiscal 2015 equaled about $21,832.82 for every person in the United States with a job.
In 2012, President Barack Obama struck a deal with Republicans in Congress to enact legislation that increased taxes. That included increasing the top income tax rate from 35 percent to 39.6 percent, increasing the top tax rate on dividends and capital gains from 15 percent to 20 percent, and phasing out personal exemptions and deductions starting at an annual income level of $250,000.
An additional 3.8 percent tax on dividends, interest, capital gains and royalties – that was embedded in the Obamacare law – also took effect in 2013.
The largest share of fiscal 2015’s record-setting tax haul came from the individual income tax. That yielded the Treasury $1,540,802,000,000. Payroll taxes for “social insurance and retirement receipts” took in another $1,065,277,000,000. The corporate income tax brought in $343,797,000,000.
Republican presidential candidate Donald Trump unveiled an ambitious tax plan Monday that he says would eliminate income taxes for millions of households, lower the tax rate on all businesses to 15% and change tax treatment of companies’ overseas earnings.
Under the Trump plan, no federal income tax would be levied against individuals earning less than $25,000 and married couples earning less than $50,000. The Trump campaign estimates that would reduce taxes to zero for 31 million households that currently pay at least some income tax. The highest individual income-tax rate would be 25%, compared with the current 39.6% rate.
Many middle-income households would have a lower tax rate under Mr. Trump’s proposal, but because high-income households generally pay income tax at much higher rates, his proposed across-the-board rate cut could have a positive impact on them, too. For example, an analysis of Jeb Bush’s plan – taxing individuals’ incomes at no more than 28% – by the business-backed Tax Foundation found that the biggest percentage winners in after-tax income would be the top 1% of earners.
Mr. Trump’s plan appears designed to help him, as the GOP front-runner, cement his standing as a populist – though that message is complicated by the fact that the billionaire, like other Republican leaders, would eliminate the estate tax.
“My plan will bring sanity, common sense and simplification to our country’s catastrophic tax code,” Mr. Trump said in an interview. “It will create jobs and incentives of all kinds while simultaneously growing the economy.”
But Mr. Trump will face a challenge in convincing skeptics that his aggressive tax cuts can be implemented without adding to the federal deficit.
To pay for the proposed tax benefits, the Trump plan would eliminate or reduce deductions and loopholes to high-income taxpayers, and would curb some deductions and other breaks for middle-class taxpayers by capping the level of individual deductions, a politically dicey proposition. Mr. Trump also would end the “carried interest” tax break, which allows many investment-fund managers to pay lower taxes on much of their compensation.
A significant revenue gain would come from a one-time tax on overseas profits that could encourage U.S. multinational corporations to return an estimated $2.1 trillion in cash now sitting offshore, largely to avoid U.S. taxes. His proposal would impose a mandatory 10% tax on all of that money, even if the money stays overseas, but allow a few years for the tax to be paid. The Trump campaign estimates that many companies would choose to bring their money back home, boosting jobs and investment in the U.S.
Mr. Trump also would impose an immediate tax on overseas earnings of American corporations; currently, such tax payments can be deferred. All told, the campaign says the plan would be revenue neutral – neither raising nor lowering federal revenues – by the third year and then begin adding revenue.
With the tax plan’s release, Mr. Trump is moving to quell criticism that his campaign has been more style and less substance. This tax proposal follows his well-known immigration plan in the summer and one on gun rights last week.
Mr. Trump saves some money and fiscal headaches by skipping some of the big but complicated and costly changes that other candidates have embraced, such as business-expensing breaks and so-called territorial taxation for multinational corporations.
On the individual side, Mr. Trump would consolidate the current seven rates to four, of 0%, 10%, 20% and 25%. Those changes alone would exempt all married couples making $50,000 or less from the income tax, as well as singles making $25,000 or less.
The 10% bracket would apply to incomes from $50,000 to $100,000 for a married couple; the current 10% bracket has a ceiling of $18,450. The new 25% top bracket would apply to married couples’ incomes in excess of $300,000, which currently are subject to rates as high as 39.6%. Mr. Trump also would cut the top capital gains rate to 20%, from the current 23.8%. And he would eliminate the alternative minimum tax.
But the candidate doesn’t propose to end taxation of individuals’ investment income, as some other Republicans propose, nor would he expand the standard deduction, child-credit and other middle-class breaks as some other GOP candidates have suggested.
For businesses, Mr. Trump’s 15% rate is among the lowest that have been proposed so far. Rand Paul has proposed a 14.5% flat-tax rate for all types of income. Marco Rubio, another candidate with a detailed plan, would tax all business income at no more than 25%. Mr. Bush has proposed a 20% top corporate rate. The current top corporate tax rate is 35%, and small business income is subject to rates of as much as 39.6% (although many small businesses pay out a lot of their profits as lower-taxed dividends or capital gains). The campaign argues the rate would be among the lowest among industrialized nations, giving U.S. companies an edge to compete.
The lower corporate rates would provide “a tremendous stimulus for the economy,” the campaign’s plan argues. Mr. Trump would not, however, allow businesses to expense all their new equipment purchases, as some other Republicans do.
The plan proposes to simplify tax filing for many lower- to middle-income households. The plan says that some 42 million households that currently file tax forms to establish that they don’t owe any federal income tax now will be able to file their returns on a single page.
The 31 million households that have been paying some taxes but now won’t have any tax liability can use the same single-page, and keep an average of $1,000 in tax savings, the Trump campaign says. Today, 36% of American households today pay no income taxes, and that number would grow to 50%.
The Trump plan would raise revenues in at least a couple of significant ways. It would limit the value of individual deductions, with middle-class households keeping all or most of their deductions, higher-income taxpayers keeping around half of theirs, and the very wealthy losing a significant chunk of theirs. It also would wipe out many corporate deductions.
All taxpayers would keep their current deductions for mortgage-interest on their homes and charitable giving.
The plan also proposes capping the amount of interest payments that businesses can deduct now, a change phased in over a long period, and would impose a corporate tax on future foreign earnings of American multinationals.
In 2013, more than 200,000 people on net fled states with Democrat governors for ones run by Republicans, according to an analysis of newly released IRS data by Americans for Tax Reform.
“People move away from high tax states to low tax states. Every tax refugee is sending a powerful message to politicians,” said ATR President Grover Norquist. “They are voting with their feet. Leaders in Texas and Florida are listening. New York and California are not.”
That year, Democrat-run states lost a net 226,763 taxpayers, bringing with them nearly $15.7 billion in adjusted gross income (AGI). That same year, states with Republican governors gained nearly 220,000 new taxpayers, who brought more than $14.1 billion in AGI with them.
Only one-third of states with Democrat governors gained taxpayers, compared to three-fifths of states with Republican governors.
Top 5 loser states for Democrat governors in 2013:
· Illinois (68,943 people with $3.8 billion in AGI)
· California (47,458 people with 3.8 billion in AGI)
· Connecticut (14,453 people with $1.8 billion in AGI)
· Massachusetts (11,915 people with $1 billion in AGI)
Top 5 winner states for Republican governors in 2013:
· Texas (152,912 people with $6 billion in AGI)
· South Carolina (29,176 people with 1.6 billion in AGI)
· North Carolina (26,207 people with $1.5 billion in AGI)
· Arizona (16,549 people with $1.5 billion in AGI)
The single largest net migration from one state to another took place between New York and Florida (17,355 people).
A federal judge on Friday ordered the Internal Revenue Service to reveal White House requests for taxpayers’ private information, advancing a probe into whether administration officials targeted political opponents by revealing such information.
Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia rejected the IRS’s argument that a law designed to protect the confidentiality of such information protected the public disclosure of such communications with the White House.
The law, 26 U.S. Code § 6103, was passed after the Watergate scandal to protect citizens from retribution by federal officials. Jackson scoffed at the administration’s claims that the statute could be used to shield investigations into whether private tax information had been used in such a manner.
“The Court is unwilling to stretch the statute so far, and it cannot conclude that section 6103 may be used to shield the very misconduct it was enacted to prohibit,” Jackson wrote in her order.
The decision was a victory for Cause of Action, the legal watchdog group that sued the IRS in 2013 seeking records of its communications with the White House and potential disclosure of confidential taxpayer information.
The group called the decision “a significant victory for transparency advocates” in a Friday statement
“As we have said all along, this administration cannot misinterpret the law in order to potentially hide evidence of wrongdoing,” said Dan Epstein, the group’s executive director. “No administration is above the law, and we are pleased that the court has sided with us on this important point.”
The lawsuit came after Treasury’s inspector general for tax administration, the IRS’s official watchdog agency, revealed that it was investigating whether Austan Goolsbee, the White House’s former chief economist, illegally accessed or revealed confidential tax information related to Koch Industries.
The corporation’s owners, Charles and David Koch, are prominent funders of conservative and libertarian groups that often oppose the White House’s policy priorities.
Goolsbee “used Koch Industries as an example when discussing an issue noted in the [President’s Economic Recovery Board] report that half of business income goes to companies that do not pay corporate income tax because they are pass-through entities and that many of them are quite large,” the White House said in 2010.
His apparent knowledge of Koch’s tax history, detailed during a conference call with reporters, “implies direct knowledge of Koch’s legal and tax status, which would appear to be a violation” of federal law, said Sen. Chuck Grassley (R., Iowa), the chairman of the Senate Judiciary Committee, at the time.
Subcommittee On Oversight, Agency Action, Federal Rights And Federal Courts
Chairman: Ted Cruz
Witnesses: John Koskinen, Cleta Mitchell, Stephen Spaulding, Edward D. Greim, Lawrence Noble, Toby Marie Walker, Diana Aviv, Jenny Beth Martin, Gregory L. Colvin, Jay Sekulow
Democratic presidential candidate Hillary Clinton will propose nearly doubling the U.S. capital gains tax rate on short-term investments to 39.6 percent, the Wall Street Journal reported Friday.
A Clinton campaign official said the Clinton rate plan would affect investments held between one and two years, which are currently taxed at a 20 percent capital gains rate, the newspaper reported.
Clinton, the front-runner for the 2016 Democratic presidential nomination, will outline her plan in a speech Friday in New York. She will argue that corporate efforts to boost stock prices in the short term undercuts longer-term economic growth and hurts American workers, the newspaper said.
Top-bracket single earners with taxable income higher than $413,201 and married couples filing jointly with income above $484,850 would be affected, the newspaper reported.
The campaign official, who was not identified, said the plan would not change the capital gains rate for lower-income taxpayers, the journal said.
The plan would not count an extra 3.8 percent tax on net investment income included as part of the federal healthcare law, it said.
Fines? What fines? Those are ‘shared responsibility payments.’
From the Washington Free Beacon:
300,000 Taxpayers Overpaid Obamacare Fine by $38 Million, IRS May Not Return Money
By Morgan Chalfant | July 15, 2015
Approximately 6.6 million U.S. taxpayers paid a penalty for not having health insurance imposed this year under Obamacare, and hundreds of thousands of them overpaid the fine.
Bloomberg reported Wednesday that the number of taxpayers paying the fine, which was put in place to encourage Americans to enroll in health coverage, exceeded the Obama administration’s initial estimate by 10 percent.
Funny how all of the ‘bad stuff’ about Obama-Care was underestimated. What are the odds?
According to a new report from the National Taxpayer Advocate, an independent organization within the Internal Revenue Service (IRS), the average fine paid by taxpayers was $190. The penalty, however, can reach up to 1 percent of one’s income.
The report also discovered that about 300,000 taxpayers, most of whom should have been deemed exempt because of low income, overpaid the fine by $35 million. The average amount overpaid by each individual was $110.
So Obama-Care even fined the poor. What a surprise.
The IRS has yet to decide whether or not it will return the funds to those who overpaid…
According to the report, approximately 10.7 million U.S. taxpayers filed for exemption from the penalty…
And never mind that most of these people getting exemptions are the very people Obama-Care was supposed to get to pay their ‘shared responsibility.’
Remember those horrifying police raids in Wisconsin a while back? With no hyperbole, it was modern-day tyranny that should have incensed the entire nation, regardless of political affiliation or viewpoint. Instead, very few ever even heard about it. Why? Because progressives were the perpetrators and conservatives were the targets. The raids were part of a so-called “investigation” of conservatives who were supporting Scott Walker.
Well new email evidence suggests that Lois Lerner may have been in cahoots with a Wisconsin official regarding the investigation.
From the WSJ:
Wisconsin’s campaign to investigate conservative tax-exempt groups has always seemed like an echo of the IRS’s scrutiny of conservative groups applying for tax-exempt status. It turns out that may be more than a coincidence.
Former IRS tax-exempt director Lois Lerner ran the agency’s policy on conservative groups. Kevin Kennedy runs the Wisconsin Government Accountability Board (GAB) that helped prosecutors with their secret John Doe investigation of conservative groups after the 2011 and 2012 recall elections of Governor Scott Walker and state senators.
Emails we’ve seen show that between 2011 and 2013 the two were in contact on multiple occasions, sharing articles on topics including greater donor disclosure and Wisconsin’s recall elections. The emails indicate the two were also personal friends who met for dinner and kept in professional touch. “Are you available for the 25th?” Ms. Lerner wrote in January 2012. “If so, perhaps we could work two nights in a row.”
This timing is significant because those were the years when the IRS increased its harassment of conservative groups and Wisconsin prosecutors gathered information that would lead to the John Doe probe that officially opened in September 2012. Ms. Lerner’s lawyer declined comment. Mr. Kennedy said via email that “Ms. Lerner is a professional friend who I have known for more than 20 years” but declined further comment.
There are dozens of current and former federal, state and local employees who should be in jail right now because of this. Chief among them? Lois Lerner. But I’m not going to hold my breath.
IRS Commissioner John Koskinen has confirmed to Congress that illegal immigrants granted amnesty under President Obama’s new programs could claim back refunds even when they never filed returns to pay their taxes in the first place.
Sen. Chuck Grassley, who had pressed Mr. Koskinen over the issue, released written responses Wednesday in which the commissioner admitted he’d botched the question earlier and, in fact, illegal immigrants granted the amnesty will now be able to claim refunds on tax returns they never even filed, thanks to the Earned Income Tax Credit.
“To clarify my earlier comments on EITC, not only can an individual amend a prior year return to claim EITC, but an individual who did not file a prior year return may file a return and claim EITC (subject to refund limitations under section 6511 of the Internal Revenue Code),” Mr. Koskinen said.
He insisted, however, that he doubts many illegal immigrants will take advantage of the loophole because they would have to be able to prove their earnings for those years they never filed returns.
“Filers would have to reconstruct earnings and other records for years when they were not able to work on the books,” he said.
Taxpayers must have Social Security numbers in order to claim the EITC, and illegal immigrants aren’t supposed to have numbers. But Mr. Obama’s new deportation amnesty grants illegal immigrants work permits, which are then used to obtain Social Security numbers.
IRS lawyers have ruled that once illegal immigrants get numbers, they can go back and refile for up to three previous years’ taxes and claim refunds even for time they were working illegally.
The lawyers said since the EITC is a refundable credit, that’s allowed even when the illegal immigrants worked off the books and never paid taxes in the first place.
“Section 32 of the Internal Revenue Code requires an SSN on the return, but a taxpayer claiming the EITC is not required to have an SSN before the close of the year for which the EITC is claimed,” Mr. Koskinen said. “At your request, the IRS has reviewed the relevant statutes and legislative history, and we believe that the 2000 Chief Counsel Advice (CCA) on this issue is correct.”
Mr. Koskinen had initially said illegal immigrants could claim refunds, but only for years they’d filed returns and presumably had paid some taxes.
Most of Mr. Obama’s amnesty is on hold after federal courts ruled he likely broke the law by acting on his own without Congress‘ approval and without putting his policy out for public review and comment.
But a 2012 policy that applies to so-called Dreamers, or young adult illegal immigrants brought to the U.S. as children, is in effect.
Homeland Security has approved 664,607 initial applications for Dreamers, and approved another 243,872 renewals over the last year, extending the initial two-year amnesty for another two years.
The IRS refused to fire most of its own employees found to be cheating on their taxes – and in some cases even quickly turned around and promoted them within the year, according to a new audit released Wednesday.
In about 60 percent of cases of “willful violations” IRS managers found mitigating circumstances and refused to fire the employees, even though the law calls for that penalty. In some of those cases the managers didn’t even document why they’d overridden the penalty, said Treasury Inspector General for Tax Administration J. Russell George.
“Given its critical role in Federal tax administration, the IRS must ensure that its employees comply with the tax law in order to maintain the public’s confidence,” Mr. George said. “Willful violation of the law by IRS employees should not be taken lightly, and the IRS Commissioner should fully document decisions made to retain employees whom management has proposed be terminated.”
During the decade from 2004 to 2013, the IRS identified nearly 130,000 potential cases of tax violations by its own employees, and concluded about 10 percent of those were actual violations. Mr. George said the agency did a good job of spotting those issues.
Of those 13,000 cases, 1,580 were deemed to be intentional cheaters, and they were sent to managers for discipline. But in 60 percent of the cases, the managers refused to fire the employees.
Among the abuses were employees who repeatedly failed to file their returns on time, those who intentionally inflated their expenses and those who claimed the stimulus homebuyer’s tax credit without actually buying a home.
The IRS said its employees have a compliance rate of higher than 99 percent, which is actually much higher than other employers and is tops among all major federal agencies.
“Over ten years, TIGTA found an average of a little more than 150 IRS employees a year committed a willful tax violation. Of the total cases, 620 – or nearly 40 percent – resulted in the employee leaving their position because they were terminated, resigned or retired. Others faced strong disciplinary actions that included terminations, suspensions and reprimands,” the agency said.
The IRS also said it has taken steps to cancel bonuses that would otherwise have been paid to the tax cheats.
“Nonetheless, the IRS agrees that we can improve this process. The changes will include a more proactive approach to ensure timeliness and consistency and provide more transparency in the mitigation process while preserving the commissioner’s authority provided by federal law,” the agency said in its statement.
Of the 1,580 employees deemed to have intentionally cheated on their taxes, 108 of them received no punishment at all. The others were at least admonished, while 25 percent were fired and 14 percent were allowed to resign or retire instead of being fired.
The vast majority of substantiated reports involved “nonwillful” violations. Of those, just 238, or about 1 percent, were deemed serious enough to be fired. Another 1 percent were allowed to retire or resign, 47 percent were admonished, 26 percent were sent to counseling and 14 percent were closed without any punishment.
More than 2,000 employees had multiple red flags during the decade, the inspector general said. Investigators pulled a sample of 15 cases where an employee had repeated intentional violations and found that even there, the majority were allowed to remain on the job.
The inspector general took a sampling of 364 cases of intentional cheaters and found that 108 of them were not only not fire, but were given raises or promotions within a year of being found to be cheating.
Sen. Orrin G. Hatch, chairman of the Finance Committee, which oversees the IRS, said the report was a black mark for the IRS.
“Even worse, the agency appears to have rewarded some of them with cash bonuses, promotions, and paid time off,” the Utah Republican said. “This is unacceptable – American taxpayers deserve better.”
IRS Commissioner John Koskinen, who along with a review board must approve the decision to keep any employees deemed to have intentionally cheated on their taxes, has insisted things at his agency have improved over the last two years, which is when another report from Mr. George exposed that the IRS had singled out tea party groups for special scrutiny in their tax-exempt applications.
Mr. Koskinen has argued that budget cuts have eviscerated morale at the IRS, and he has pleaded with Congress to give him more money to hire staff. He also defended doling out bonuses to employees.
“They are not bonuses. They are performance awards. Over 40, 45 percent of the employees don’t get them. You only get them if you perform,” he said.
But he said he’s taken steps to try to make sure tax cheats don’t get awards.
“Even though we have over 99 percent compliance, I thought it was an important point,” he said.
If you tried to contact the IRS with a question about your taxes this year, chances are you didn’t get a response. The IRS estimated that it would only answer 17 million of the 49 million calls received this filing season. Taxpayers lucky enough to have the IRS answer their calls waited an average of 34.4 minutes for assistance – nearly double the wait time last year (18.7 minutes).
IRS Commissioner John Koskinen has blamed the IRS’s “abysmal” customer service on congressional budget cuts – funding is down $1.2 billion from its 2010 peak – but a new congressional report points the finger back at the IRS. While congressional funding for the IRS remained flat from 2014 to 2015, the IRS diverted $134 million away from customer service to other activities.
In addition to the $11 billion appropriated by Congress, the IRS takes in more than $400 million in user fees and may allocate that money as it sees fit. In 2014, the IRS allocated $183 million in user fees to its customer service budget, but allocated just $49 million in 2015 – a 76 percent cut.
Commissioner Koskinen will appear before the House Ways and Means Committee this morning, one week after the federal tax filing deadline, and he can expect to be asked why the IRS cut its own customer service budget and continues to spend money on other questionable activities.
The report notes that Koskinen reinstated bonuses weeks after his appointment, has allowed IRS employees to spend roughly 500,000 work hours on union activities, and failed to collect delinquent taxes owed by federal employees. The tax agency has also been strained by Obamacare. According to the report, the IRS has spent “over $1.2 billion on the President’s health care law to date, with a planned expenditure this year of an additional $500 million.”
The IRS’s total annual $11 billion budget is dwarfed by the amount of improper tax payments it makes each year. According to the report, the IRS paid out $17.7 billion in improper Earned Income Tax Credit payments (which are supposed to help poor and low-income individuals) and an additional $6 to $7 billion in improper child tax credit payments.
Wow. In 7 years Obama has this agency so screwed up with Obamacare that they are forced to ignore a whopping 60% of all taxpayer phone calls because service has gotten so bad:
WASHINGTON TIMES – IRS Commissioner John Koskinen said Tuesday that service at his agency has gotten so bad that they are ignoring more than 60 percent of taxpayers’ phone calls during this tax season.
Speaking at the National Press Club, Mr. Koskinen pleaded with more money, saying a budget boost would help them staff their overwhelmed customer service lines. He also said it would help reverse staffing cuts in their compliance division, where he said the government will lose $2 billion this year in money it would otherwise have been able to collect if it had better staffing.
If you can’t get through to the IRS, you should call the White House and see if Barack has some free time to help you.