North Carolina GOP Wants To Tax The Poor Even More Than It Already Does

By Alan Pyke/Think Progress

North Carolina lawmakers are seeking to shift much of the state’s tax burden off its wealthiest citizens and most profitable businesses and onto its low- and middle-income residents. After initially proposing to eliminatethe state’s income tax outright, Republicans are instead introducing a flat income tax rate across all earning levels. The proposal unveiled Thursday would also expand the reach of sales taxes in the state, which hits low-income families hardest, and comes on top of the March repeal of a tax credit for 900,000 working familiesin the state.

The state’s effective tax rates already favor the rich. The North Carolina Justice Center, a progressive think tank in the state, explains that the richest one percent of tarheels pay 6.5 percent of their income in combined sales and income taxes at the state level, while the lower 80 percent of earners pay between 9 and 10 percent combined. Yet Republicans propose to give that top one percent a tax cut while hiking rates for those already paying more:

NCJC adds that the lost revenue from this plan “could be as high as $573 million” per year. Given that state law requires balanced biannual budgeting, the tax proposal is likely to force major cuts to public services if approved.

If all of this sounds familiar, it should. Supply-side economists have pushed for this sort of regressive tax reform in the name of economic growth for over 30 years, at all levels of American governance. Art Laffer, the chronically misleading godfather of this widely discredited approach to tax policy, helped press for the initial repeal proposal from North Carolina’s conservatives. Laffer’s had a prominent hand in the broad wave of state-level supply-side tax reform proposals since last year, and statehouse Republicans seem prepared to continue believing him even after his research for the American Legislative Exchange Council has been shown to be error-riddled.

Detroit News: 4 Tax Liens On Kevyn Orr's Home Include 2 Still Outstanding

From Deadline Detroit:

Ooops, this is what PR types call "stepping on the message" and politicos dub "bad optics."

Keyvn Orr, the attorney appointed to get Detroit financially straight, was hit with with four tax liens on his Maryland home in four years for income and unemployment taxes, Joel Kurth and Chad Livengood of The Detroit News found via online sleuthing.

They note that the situation is ironic "since Orr is tasked with improving tax collections."

State records show Orr, who was appointed emergency manager on Thursday, has two outstanding liens on his $1-million home in Chevy Chase, Md., for $16,000 in unemployment taxes in 2010 and 2011. Two other liens of more than $16,000 in unemployment and income taxes were satisfied in 2010 and 2011, records show.

Orr said he didn't know anything about the liens when shown records of them Friday morning by The Detroit News.

"I don't know what they are," Orr said, as his new boss, Gov. Rick Snyder, sat next to him in The News' offices. "That's surprising to me, to be honest."

Quick damage control followed.

By late that afternoon, Snyder's spokeswoman said Orr would pay "in full ASAP." He blames the embarrassment on his tax accountant.

State backround checkers hadn't spotted the liens, Snyder's press secretary told The News.

READ MORE:  THE DETROIT NEWS

Boehner Decides A Tax Hike On Millionaires Won’t Kill Jobs, After All

By Aviva Shen/Think Progress

With time dwindling before the scheduled tax increase on all Americans on January 1, House Speaker John Boehner (R-OH) has switched to his“Plan B,” allowing the Bush tax cuts to expire on income in excess of $1 million. Originally, Boehner refused to consider any deal without an extended tax cut for the top 1 percent of earners, claiming it would kill jobs and hurt businesses.

Bohener’s new baseline is still far higher than Obama’s latest limit, which revised the income bracket up from incomes of $250,000 to $400,000. But the Speaker has changed his tune since May, when Rep. Nancy Pelosi (D-CA) tried to hold the same vote.

At the time, Boehner refused to let Congress pass a tax cut for middle-class families without one for millionaires, calling Pelosi’s offer “bullshit” at a closed meeting. He cited a popular GOP myth that small businesses would be affected by the expiration of the tax cuts on individuals making $250,000 or more, claiming it was “a big mistake” that would “kill jobs.”

“I believe that raising taxes at this point in our recovery is a big mistake,”Boehner said at a Capitol press conference when asked about Pelosi’s letter. [...] “Even under Ms. Pelosi’s argument, half of those who would get this higher tax are small-business people that are sub-Chapter S or other types of pass-through entities,” Boehner said. “At a time when we are trying to help small businesses create jobs, this proposal would kill jobs.”

In fact, only 3 percent of small businesses would be affected by the tax increase. Before the Bush tax cuts, small businesses grew twice as fast under Clinton rates.

Boehner’s fiscal cliff deal is full of pseudo-compromises. Besides his new willingness to allow tax cuts to expire for millionaires, the Speaker’s deal also promises not to bring the nation to the brink of default again for at least one year — in exchange for devastating spending cuts.

UPDATE

The House will vote on two separate proposals to extend the Bush tax cuts for people making $250,000 and below or for people making $1 million and below on Thursday.

Obama throws down gauntlet on taxes

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Thirty-Six Congressional Republicans (And Counting) Have Distanced Themselves From Norquist’s Pledge

Greg Noth/Guest blogger for Think Progress

Every day, more Republicans in Congress are backing away from Americans for Tax Reform President Grover Norquit’s anti-tax pledge. For more than 20 years, the pledge, which stipulates that those who sign will never — under any circumstance — vote to raise taxes while in Congress, has virtually been a requirement for Congressional Republicans.According to ATR, just 16 of the 234 House Republicans and 6 of the 45 Senate Republicans that comprise the 113th Congress did not sign the pledge.

However, the pledge may not have the staying power it once did. As of this writing, more than a dozen House Republicans — including Majority Leader Eric Cantor — and 10 GOP senators have distanced themselves from the pledge to one degree or another. Here are just a few examples or what members had to say:

— Sen. Kelly Ayotte (R-NH): “The only pledge that keeps me up at night is the pledge I owe to the people of New Hampshire and our country to work as hard as I can to make sure America doesn’t go bankrupt.”

– Sen. Saxby Chambliss (R-GA): “I care more about my country than I do about a 20-year-old pledge . . . I don’t worry about that because I care too much about my country. I care a lot more about it than I do Grover Norquist.”

– Sen. Bob Corker (R-TN): “Well, I’m not obligated on the pledge. I made Tennesseans aware, I was just elected, that the only thing I’m honoring is the oath I take when I’m sworn in this January.”

– Rep. Eric Cantor (R-VA): “When I go to the constituents, it’s not about that pledge. It’s about trying to solve problems.”

– Rep. Peter King (R-NY): “A pledge is good at the time you sign it . . . In 1941, I would have voted to declare war on Japan. But each Congress is a new Congress. And I don’t think you can have a rule that you’re never going to raise taxes or that you’re never going to lower taxes. I don’t want to rule anything out.”

– Rep. Timothy Johnson (R-IL): “I would never in a million years have considered this as some kind of a locked-in-granite pledge. Frankly, I didn’t even remember it. That shows you how obscure it was to me.”

Other Senators that have signed the pledge and distanced themselves from Norquist includeSen. Jeff Sessions (R-AL), Sen. Lindsey Graham (R-SC), Sen. Tom Coburn (R-OK), Sen. David Vitter (R-LA), Sen. John McCain (R-AZ), Sen. Mike Johanns (R-NE), and Sen. Mike Enzi (R-WY). House Republicans also jumping ship include: Rep. John Boehner (R-OH), Rep. Chris Gibson (R-NY), Rep. Reid Ribble (R-WI), Rep. Tom Latham (R-IA), Rep. Rick Crawford (R-AR), Rep. Pat Meehan (R-PA), Rep. Jon Runyan (R-NJ), Rep. Lee Terry (R-NE), Rep. Jeff Fortenberry (R-NE),Rep. Charles Boustany (R-LA), Rep. Charlie Bass (R-NH), Rep. Tom Cole (R-OK), Rep. Mike Simpson (R-ID), Rep. John Kline (R-MN), Rep. Erik Paulsen (R-MN), Rep. Chip Cravaack (R-MN),Rep. Adrian Smith (R-NE), Rep. Scott Rigell (R-VA), Rep. Trey Gowdy (R-SC), Rep. Tom Reed (R-NY), Rep. Allen West (R-FL), Rep. Robert Dold (R-IL), and Rep. Howard “Buck” McKeon (R-CA).

Romney Cites Study Based On Repealing Almost All Middle Class Tax Breaks To Bolster His Tax Plan

By Pat Garofalo/Think Progress

Mitt Romney has been desperately trying to refute a study by the Tax Policy Center showing that he can’t mathematically achieve his goals of reducing income tax rates while shielding the middle class from a tax increase and not adding to the deficit. If Romney is committed to his rate reduction and deficit neutrality, he would have to raise middle class taxes by $2,000, even under the most generous assumptions.

Romney has been pointing to “six studies” that he claims show that his tax plan work. However, those “studies” (which are mostly blog posts and op-eds) show no such thing.

So now the Romney campaign is touting a 2006 study from the congressional Joint Committee on Taxation that he claims vindicates his approach, telling Roll Call the study shows “how a ‘Romney-style tax plan’ could bolster growth.” According to the study, tax reform that eliminates deductions and loopholes and reduces income tax rates will slightly increase economic growth over a decade. But the study assumes that nearly all middle class tax breaks — including those for children, mortgages, and employer contributions for health care — are repealed in their entirety:

Under the proposal, all personal exemptions, itemized deductions, personal credits except for the earned income credit, and all above-the-line adjustments to income except for retirement savings deductions and the deduction for self employment taxes would be repealed. The largest categories of deductions repealed are present-law deductions for home mortgage interest expenses, State and local taxes, and charitable contributions. In addition, the exclusions for certain employee fringe benefits, such as employer contributions for health and life insurance, would be repealed. The standard deduction would remain.

The study also found that such a plan would result in the “redistribution” of income tax liability from high-income earners to the middle class. And the promised job growth is only between 1 and 2 percent over ten years (one to two million jobs), while Romney promises that his tax plan will create seven million jobs over four years.

Romney’s claims about job creation under his tax plan are almost entirely fabricated. An economic adviser for both the Reagan and George H.W. Bush administrations said this week that Romney’s tax plan won’t create jobs.

Gingrich Concedes Romney Wasn’t Honest About His Tax Plan During Debate

By Judd Legum/Think Progress

This morning on Meet The Press, Obama campaign adviser Robert Gibbs confronted Newt Gingrich on a fundamental inconsistency in Romney’s description of his tax plan. During the primary debates, Romney insisted that everyone in America would get a 20% tax cut, including the 1%. But last week’s during his debate with Obama, Romney insisted that his tax cut would not reduce taxes at all for wealthy Americans.

Gingrich acknowledged the clear inconsistency, saying “I think it’s clear he changed.” He described the change as “good politics.”

Watch it:

Of course, while Romney’s spin regarding his plan has changed, the plan itself has not. Independent experts have concluded that, even if Romney eliminated every tax deduction, it still wouldn’t counterbalance his massive tax cuts for the wealthy.

His tax plan was one of 27 issues where Romney was less than honest during the debate. Romney’s campaign also conceded he misstated the truth on green jobs.

GOP Strategist Says Romney Is Withholding Details Of His Tax Plan To Avoid Criticism

By Josh Israel/Think Progress
Republican consultant Mike Murphy, a former Romney strategist, said on NBC’s Meet the Press Sunday that it is unfair to criticize Mitt Romney’s lack of specificity on how to pay for his proposed 20 percent income tax cut. Should Romney identify what loopholes he would cut to offset the tax cuts, Murphy argued, he would be criticized for doing so.

Murphy argued:

Here is the problem. You guys won’t give him any credit for closing loopholes, because like you guys, he won’t name the loopholes. Why? Because you’ll attack him for doing it. You attack him for not giving you a little target… and then you attack him when you get the target.

Watch the video:

Murphy’s argument is that if Romney is transparent with the American people about what tax loopholes he would close to offset the roughly $5 trillion such a 20 percent tax cut would cost — those proposals might be subject to scrutiny and criticism.

What sort of “loopholes” might Romney include? Murphy suggested perhaps it might include reductions in how much families with mortgages can deduct their interest payments from their taxes. The non-partisan Tax Policy Center estimates that those deductions save taxpayers anaverage of $559 annually.

Romney To Small Businesses: ‘Don’t Be Expecting A Huge Cut In Taxes’

By Igor Volsky/Think Progress

Mitt Romney told voters in Westerville, Ohio on Wednesday not to expect a “huge cut in taxes” from his economic proposal, noting that he is “also gonna get rid of deductions and exemptions.” The message is at odds with the GOP nominee’s promises to cut taxes for the middle class and small businesses, while maintaining the current tax burden on the rich.

ROMNEY: Number 5, I’m going to champion small business. Small business, where jobs come from. And let me tell you how to do that. One, as Sen. Portman said, we’ve got to reform our tax system. Look, small businesses typically pay tax at the individual tax rate. And so, our individual income taxes are ones I want to reform, make them simpler. I want to bring the rates down.By the way, don’t be expecting a huge cut in taxes, because I’m also going to lower deductions and exemptions. But by bringing rates down, we’ll be able to let small businesses keep more of their money, so they can hire more people.

Watch it:

Romney has been pledging that he will cut taxes for all Americans by 20 percent, while also instituting tax reform that will not add to the nation’s deficit. But numerous analyses of the plan — including a recent study by the nonpartisan Tax Policy Center — found that there are not enough loopholes in the tax code to finance the loss in revenue that would result from Romney’s massive cuts by only targeting deductions for the rich, meaning that middle class Americans will experience a net tax increase.

Romney Says Obama Did Not Raise Taxes ‘In His First Four Years’

By Igor Volsky/Think Progress

Mitt Romney has argued for months that President Obama raised taxes on middle class Americans and small businesses during his first term. But during a rally in Ohio on Tuesday, the GOP presidential candidate inadvertently undermined his claim, calling tax increases a “new idea” that Obama would institute in a second term:

ROMNEY: His idea now. He’s got one new, one new idea. I admit this, he has one thing he did not do in his first four years, said he’s going to do in his next four years, which is to raise taxes. And is there anybody who thinks that raising taxes will help grow the economy?

Watch it:

UPDATE

The Romney campaign responds: “President Obama has raised taxes on millions of middle-class Americans during his first term in office,” said spokeswoman Amanda Henneberg. “Governor Romney was clearly communicating about an additional tax increase President Obama is proposing on American small businesses that will jeopardize over 700,000 jobs.”

What Romney Won’t Tell You About The 47 Percent

By Pat Garofalo/Think Progress

The Romney campaign is in damage control mode today, trying to explain Romney telling wealthy donors in a private meeting that “there are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.”

“These are people who pay no income tax,” Romney continued, in a video posted by Mother Jones. “My job is is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.” But who are the 47 percent of Americans who currently have no federal income tax liability?

Mostly, they are either too poor to qualify for even the lowest tax bracket (but still pay federal payroll tax, and state or local sales taxes, gas taxes, and excise taxes), or they benefit from tax credits for the working poor, the elderly, or students, as these charts from the Tax Policy Center show. Only 7 percent of the country is non-elderly and has no federal tax liability, and most of them make less than $20,000:

Here are the reasons for those who paid no federal income tax reaching that point:

In 2011, payroll tax receipts totaled $818 billion, only $200 billion less than was brought in by the federal income tax. Those Americans who paid payroll taxes, but had no income tax liability, still pay about 15 percent of their income, higher than the 13 percent Romney pays.

As ThinkProgress has explained, more and more income has become concentrated at the top of the income scale in the last few decades, so the wealthy have paid a larger share of federal taxes, because they have a larger share of the income.

Romney is hardly alone in his contempt for those who don’t have any federal income tax liability (even though people who fall into that category disproportionately live in Republican states). Over the last few years, many Republicans have explicitly called for finding a way to make the poor pay more, so that the number of federal income tax payers rises.

60 Faith Leaders Sign Letter Telling GOP Not To Raise Taxes On 24 Million Americans

By Travis Waldron/think progress
A coalition of faith leaders released a letter ahead of yesterday’s symbolic House tax vote telling Republicans not to allow the expiration of two tax credits that, together, would raise taxes on more than 15 million Americans. In the letter, the faith leaders called for extensions of the 2009 expansions of the Child Tax Credit and Earned Income Tax Credit, two provisions Republicans allow to expire in the bill they approved.

The GOP’s plan to let the expanded tax credits expire, the letter said, was “simply unconscionable“:

These tax credits help families meet basic needs, reduce poverty, and remove barriers to work. It is hypocritical for lawmakers who talk about family values to abandon improvements in these effective, family-supporting programs. Failing to extend the improved tax credits would jeopardize the economic security and well-being of more than 15 million families and more than 36 million children within those families. This is simply unconscionable.

As ThinkProgress has noted, the GOP would also allow for the expiration of the American Opportunity Tax Credit, a tax break on college tuition payments that would affect roughly 11 million families. In total, the expiration of all three tax credits would raise taxes on 24 million Americans, 10 times the number that would see a tax increase under the Democratic plan to allow only the Bush tax cuts on higher incomes to expire.

This isn’t the first time that faith leaders have criticized Republican policies. An assortment of faith leaders panned the House GOP’s budget, calling it an “immoral disaster” that “robs the poor.” This summer, Sister Simone Campbell, one of this letter’s signers, led the Nuns On A Bus tour across the country to protest GOP’s cuts to programs that help the poor and middle class.

Under Obama, Taxes Hit A 30-Year Low

By Pat Garofalo/Think Progress

To hear conservatives and Tea Partiers tell it, President Obama is a serial tax-raiser who has increased taxes on “millions of Americans.” But according to the latest data from the Congressional Budget Office, tax rates under Obama hit a 30-year low in 2009, in part because of the tax cuts he implemented in response to the country’s economic downturn:

Americans paid the lowest tax rates in 30 years to the federal government in 2009, in part because of tax cuts President Obama sought to combat the Great Recession, congressional budget analysts said Tuesday. [...]

During Obama’s first year in office, the average tax rate paid by all households fell to 17.4 percent, down from 19.9 percent in 2007, according to the CBO. The 2009 rate was significantly lower than the previous low of 19.4 percent in 2003 and well below the 30-year average of 21 percent.

Now, Obama is proposing to raise tax rates on income in excess of $250,000 (which would still keep tax rates for the rich below where they were under the Clinton administration). And of course, Republicans are breaking out every falsehood in the book in order to oppose the move.

Why The Individual Mandate Is Not A ‘Massive Tax Hike’ On The Middle Class

By Travis Waldron/Think Progress

The Supreme Court ruled today that the Affordable Care Act, the comprehensive health care reform package signed by President Obama in 2010, is constitutional. The Court upheld the law’s most controversial provision, the individual mandate, ruling that it is constitutional under the government’s authority to levy and collect taxes.

Republicans have falsely claimed the mandate was the “biggest tax increase ever in American history,” so of course, conservatives immediately jumped on the idea that the individual mandate was a massive tax hike on the middle class, reviving an argument Republicans have made since the law passed more than two years ago:

WISCONSIN GOV. SCOTT WALKER (R) declared that it was a “massive tax increase.”

INDIANA SEN. DAN COATS (R) said “Right now we have something with a big tax and the American people who rejected that in 2010 are going to have a chance to break the tie in 2012.”

LOUISIANA GOV. BOBBY JINDAL (R) said “Ironically, the Supreme Court has decided to be far more honest about Obamacare than Obama was. They rightly have called it a tax. Today’s decision is a blow to our freedoms.”

IDAHO SEN. MIKE CRAPO (R) touted that the mandate was ruled a tax. “Now, we’re back into that argument,” he said.

Watch Coates:

The mandate can indeed be characterized as a tax, as the Court found. But it is not a massive tax hike on the middle class, much less the biggest tax hike in American history. The tax imposed by the individual mandate amounts to either $695 or 2.5 percent of household income for those who don’t have insurance and are not exempt based on income levels. By comparison, the payroll tax cut extension Republicans repeatedly blocked earlier this year would have added 3.1 percentage points to the tax and cost the average family $1,500 a year.

The mandate, meanwhile, would hit a small amount of Americans — somewhere between 2 and 5 percent — according to a study from the Urban Institute. The number could be even lower depending on the law’s success: in Massachusetts, the only state with an insurance mandate, less than 1 percent of the state’s residents paid the penalty in 2009.

The majority of the Affordable Care Act’s other taxes, such as a payroll tax increase and a tax on high-cost health plans, are aimed at upper-income Americans. In exchange, millions of jobs will be created as new people enter the health care system and millions of people will gain access to affordable, quality insurance that they otherwise would not have. And, as we detailed earlier today, the Court’s decision to uphold the entirety of the law will have significant benefits for the nation’s economy.

Tell Congress that you stand with Obamacare by adding your name here.

UPDATE

Sen. Marco Rubio (R-FL) characterized the mandate as a “middle class tax increase,” claiming that millions of Americans are going to have “an IRS problem.” Watch it:

Romney Adviser Says No More Tax Returns Coming: ‘We Think That’s Sufficient’

By Alex Seitz-Wald/Think Progress

Senior Romney campaign adviser Eric Fehrnstrom said today that the former Massachusetts governor has no plans to release additional tax return information, even as a new report shows the wealthy candidate has obfuscated his finances by taking advantage of an “obscure exception in federal ethics laws.”

Appearing on MSNBC this morning, Fehrnstrom said Romney has been forthcoming and complied with all laws. “So, definitely no plans on releasing any more tax returns?” host Chuck Todd pressed. Fehrnstrom reiterated what the campaign has already released, saying, “we think that’s sufficient.” Watch it:

So far, Romney has released only his full 2010 tax returns and an estimate of his 2011 return, and Fehrnstrom said Romney would disclose the full 2011 return once it’s filed. But this is fairly meager compared to other presidential candidates, who often release multiple years of returns. Indeed, Romney’s own father released 12 years of tax returns when he ran for president.

As the Washington Post reported, Romney’s existing returns hide much of what Romney is actually invested in by listing only the funds he owns, not their underlying investments.

Romney’s 2010 returns showed he made over $20 million that year and had offshore accounts in Switzerland, Luxembourg, and the Cayman Islands, and some have speculated that Romney is refusing to release returns from previous years because they might have additional embarrassing information.

ANALYSIS: GOP Candidates’ Tax Cuts For The Rich Are Up To 270 Times Larger Than Their Tax Cuts For The Middle Class

By Pat Garofalo/Think Progress

The 2012 Republican candidates are largely in lockstepwhen it comes to economic policy, wanting to give huge tax cuts to the rich and corporations while doing next to nothing to boost consumer demand or help the middle class and the unemployed who have been battered by the Great Recession. In fact, according to an analysis by Citizens for Tax Justice, the average tax cuts received by the richest 1 percent of Americans under the Republican plans would be 270 times as large as the cut received by the middle class:

The share of tax cuts going to the richest one percent of Americans under these plans would range from over a third to almost half. The average tax cuts received by the richest one percent would be up to 270 times as large as the average tax cut received by middle-income Americans.

Perry wins the award with a tax cut for the richest 1 percent that is 270 times larger than his middle class tax cut, while Gingrich’s is 190 times larger. Santorum and Romney pull up the rear with tax cuts for the rich that are 100 times larger than the cuts for the middle class, while CTJ did not analyze Jon Huntsman or Ron Paul’s plans. (CTJ uses a current law baseline, rather than a current policy baseline, to calculate its cuts. Using a current policy baseline, millions of middle class families would see a tax increase under Romney’s plan.)

CTJ also noted that “the cost of the tax plans proposed by Republican presidential candidates would range from $6.6 trillion to $18 trillion over a decade.” Therefore, “even the meager tax cuts that would go to low-income and middle-income taxpayers under these plans would almost surely be offset by the huge cuts in public services that would become necessary as a result.”