Churches differ on opinions about whether they should be politically involved. The IRS, on the other hand, is clear on its stance: churches need to stay out of the political ring or risk losing their tax-exempt status. This download provides the tax and legal guidelines faith-based organizations need to know before jumping into the political fray.
The Politics of Religion What it could cost your church for participating in political activity. By Richard R. Hammar
When Church Meets Candidate How churches can navigate candidate appearances. By Emily Lund
Avoiding the Elephant (or Donkey) in the Pulpit How pastors can preach about the important matters of the day—without becoming too political or risking a church's tax-exempt status. By Bobby Ross Jr
Supporters say a VAT can be good for economic growth. Critics say it encourages wasteful government spending.
In discussions about changing the U.S. tax system, one topic almost always arises: the possibility of adopting a value-added tax.
After all, most of the industrialized world uses a VAT—which is not to say they all like it.
Unlike a traditional sales tax, a VAT is a levy on consumption that taxes the value added to a product or service by businesses at each point in the chain of production. Businesses along the chain collect the tax and send it to the government, which supporters say is a boon for the efficiency of revenue-collection efforts. But ultimately, it is the consumer who pays the tax, because the final price of the goods and services they buy reflects all of the taxes that have been charged up to that point. The taxes are all baked into the retail price.
In this way, a VAT taxes what people consume rather than how much they earn. But this is also a reason why some consider a VAT to be unfair—because, the critics say, the burden of taxation falls disproportionately on those with lower incomes.
Supporters of a VAT, meanwhile, say it is better for economic growth than an income tax because it doesn’t tax savings or investment. And governments like it because it tends to bring in more revenue, thanks in part to the role that businesses play in its collection. Incentivizing their efforts, businesses receive credits for the VAT they pay.
The Republican presidential hopefuls are all offering tax plans that would boost the economy, which is encouraging, given that U.S. growth has slowed to a trickle over the past decade. The question is whether any of these proposals are politically viable.
Most are vulnerable to two lines of attack: Their biggest beneficiaries would be the top 1%, and they would substantially increase the $19 trillion national debt. Republicans must be able to answer these charges—and build widespread political support.
I would invite them to take a look at my Main Street Tax Plan, which was released by the Hudson Institute on Sunday. The proposal would give a tax cut to nearly all Americans: $2,153 to a single person making $60,000; $2,020 to a couple making $80,000; and $2,055 to a family of four making $95,000. The biggest beneficiaries would be middle-class Americans, who would fare twice as well as the top 1%.
Donald Trump, challenged again to release his tax returns, offers a nonsense excuse for keeping them secret. But worse than that, the national political reporters covering Trump’s presidential campaign have, yet again, missed big, obvious stories about his conduct and character
Compounding these errors, some journalists have reported nonsense as egregious as Trump’s, concerning what his tax returns would tell us. Many seem certain that they will reveal his actual wealth even though tax returns measure income, not net worth, as I will explain.
One of Donald Trump’s claims to presidential competence is his business and financial success, and so he should want voters to see the proof beyond the gilded staircases. He could enhance his credibility on the point by releasing his tax returns. ...
Mr. Trump should release his returns going back at least a decade before Super Tuesday on March 1 so Republican voters can know what they’re voting for. In addition to showing how much he’s paid in taxes, the records would help clarify how much money he’s made or lost from his various businesses. Are his real-estate ventures as profitable as he purports?
In the Democratic presidential primary, Bernie Sanders is calling for a political revolution, saying his movement can sweep in policy changes that would seem impossible in traditional American politics.
One of the ideas Mr. Sanders has advanced is more revolutionary than it looks at first glance: much higher taxes on the highest earners, so high they would reach or even pass the point after which higher tax rates mean less revenue instead of more.
Mr. Sanders has proposed a headline top tax rate of 52 percent, applying only to incomes over $10 million. But that’s just the federal income tax. When you combine it with other taxes that apply to income, like existing payroll taxes and new ones Mr. Sanders would impose to pay for Social Security, single-payer health care and family leave, and then add those on top of taxes levied by state governments, it would add up to a combined tax rate of over 73 percent on the highest incomes, more than 20 points higher than today. That’s in the average state — maximum rates in high-tax jurisdictions like California and New York City would be even higher.
What is Hillary Clinton’s attitude toward Wall Street? The question evokes ... heated and overly confident responses online, even among Democrats. Mrs. Clinton is deep in the pocket of Wall Street, as evidenced by her lucrative speeches to Goldman Sachs. Or she is a progressive fighter with a smart and sophisticated plan to rein in Wall Street’s excesses. ...
There is no right answer. She is either of these things, depending on how your brain processes information. On tax policy, Mrs. Clinton has a strong team in place and has put forth some sensible proposals, focusing the weight of her tax increases on those who earn more than $5 million annually. Some observers subtract the evidence of being too friendly to Wall Street, focusing on her detailed policy proposals. Consider her first major tax proposal of the campaign, on capital gains. Rather than suggest that we abolish the capital gains preference, she proposed a gradual step-down in rates depending on the length of time an investor holds assets, with the lowest rate of 20 percent available after five years.
Did Donald Trump violate the law January 28 by involving his private foundation in his campaign for the Republican presidential nomination?
Maybe -- and maybe not, according to three practitioners specializing in the nexus of tax and nonprofit law. But all agreed that Trump's actions put front and center why Congress needs to take a serious look at the growing connections between the charitable world and partisan politics, with a focus on what will make for sound policy.
Trump clearly used the charitable foundation under his control to further his campaign for the White House. But that may not be illegal.
Spit-balling about how to fix the IRS, Ohio Gov. John Kasich said an audience member’s suggestion to tap Mitt Romney to do it would be a “really interesting suggestion.”
“A Mitt Romney or a Michael Bloomberg would be great,” he said, musing about a one-year appointment to turn it around.
“He went out and took care of the Olympics and he did that for free,” Kasich added, recalling Romney’s highly praised effort to turn around the struggling Salt Lake City Winter Olympics in 1999. “I’m going to send him an email tonight.”
The major tax break that Republican presidential candidates are most eager to ax happens to be one that disproportionately benefits Democratic states.
Repealing the federal deduction for state and local taxes would make 23.6% of U.S. households pay an average of $2,348 more to the Internal Revenue Service for 2016. But those costs—almost $1.3 trillion over a decade—aren’t evenly spread, according to new estimates from two researchers at the Urban Institute, a think tank.
Ranked by the average potential tax increase, the top 13 states (including Washington, D.C.), as well as 16 of the top 17, voted twice for President Barack Obama. None of the four early-voting states that will winnow the Republican primary field—Iowa, New Hampshire, Nevada and South Carolina—is higher than 26th. And nearly one-third of the cost would be paid by residents of California and New York, two solidly Democratic states. ...
“After you’re told that your tax plan will increase the deficit by trillions of dollars, you need something to be on the chopping block,” said the Urban Institute’s Kim Rueben, who analyzed the deduction in a draft research paper with Frank Sammartino. “And the fact that more of the [tax] benefits go to blue states rather than red states, I think, feeds into this.” ...
With the first real votes being cast in the presidential race on Monday, this is an opportune moment to do some last-minute comparison shopping on the candidate tax reform plans. On this issue there’s a lot to cheer about. All the Republican candidates have crafted plans that would slash tax rates for everyone and most would vastly simplify the thousands of pages of IRS tax code too.
The chart shows how low tax rates would go under the Republican plans. ...
All of this contrasts sharply with the two Democratic candidate plans.
Fundamental tax reform is a fantasy. Now, let's get to work on improving our tax code.
It is an article of faith in national politics that the reform of the federal tax code is what’s standing between us and faster growth, higher productivity, better jobs, and whatever other good outcome you want to ascribe to this endeavor.
Well, riffing off of a) my own observations from decades in the trenches of this argument and b) this speech by President Obama’s chief economist Jason Furman, I disagree. Sure, there’s a lot of brush in the tax code that ought to be cleared out, some of which I’ll discuss in a moment. But these days, “tax reform” mostly means selling big, regressive tax cuts that will breed magic ponies by the herd. Instead of getting bogged down in an argument that has and will continue to lead nowhere, we’d be much better off to consider tweaks that fall far short of large-scale reform but could help—and have helped—in important ways.
Hillary Clinton would enact a number of tax policies that would raise taxes on individual and business income.
Hillary Clinton’s plan would raise tax revenue by $498 billion over the next decade on a static basis. However, the plan would end up collecting $191 billion over the next decade when accounting for decreased economic output in the long run.
A majority of the revenue raised by Clinton’s plan would come from a cap on itemized deductions, the Buffett Rule, and a 4 percent surtax on taxpayers with incomes over $5 million.
Clinton’s proposals to alter the long-term capital gains rate schedule would actually reduce revenue on both a static and dynamic basis due to increased incentives to delay capital gains realizations.
According to the Tax Foundation’s Taxes and Growth Model, the plan would reduce GDP by 1 percent over the long-term due to slightly higher marginal tax rates on capital and labor.
On a static basis, the tax plan would lead to 0.7 percent lower after-tax income for the top 10 percent of taxpayers and 1.7 percent lower income for the top 1 percent. When accounting for reduced GDP, after-tax incomes of all taxpayers would fall by at least 0.9 percent.
Most of the proposals that Hillary Clinton and Bernie Sanders have pitched for taxing the rich won’t go anywhere if Republicans keep control of the House of Representatives, as expected.
But spokesmen for both of the leading candidates for the Democratic presidential nomination said this week that they could take executive action, bypassing Congress, to go after a shorter list: the carried-interest tax advantage that investment-fund managers receive, corporate inversions that companies use to move their tax addresses offshore and -- in Sanders’s case, at least -- a few other parts of the tax code that benefit high-income taxpayers.
Their larger plans for individual income taxes include Sanders’s proposal to increase income-tax rates to levels unseen since 1981 and Clinton’s pitch for a 4 percent surcharge on the nation’s 34,000 or so highest-income taxpayers. Those are almost certainly dead on arrival. Without them, neither candidate could raise enough to finance their most expensive programs.
Donald Trump unapologetically boasts that he fully exploits the tax code. He wants to pay as little as possible to the government. “I mean, I pay as little as possible. I use every single thing in the book. And I have great people,” he said. Trump has not released his tax returns, though now he says he is “working on” it.
Hillary Clinton last week lunged into her most flagrant fit of hypocrisy yet.
With Bernie Sanders surging, she took new aim at the rich — including their use of tax dodges.
She told MSNBC: “We can go after some of these schemes … the kind of misclassifying of income, trying to make it look like it’s a capital gain, when it’s really ordinary income, going ahead and routing income through the Bahamas or the Cayman Islands or wherever.”
Huh. Bloomberg News reported in 2014 on the Clintons’ use of a prime tax dodge: They put their Chappaqua home into a “residence trust” in 2010. Such trusts can save hundreds of thousands of dollars in estate taxes.
Meanwhile, the Clintons’ family wealth has grown big-time thanks to firms with significant holdings in places like . . . the Caymans.
Democratic presidential candidate Hillary Clinton proposed raising the estate-tax rate and increasing the number of households that would face the tax.
The plan is the latest part of Mrs. Clinton’s strategy to raise taxes on high-income and wealthy Americans, which her campaign said would raise a total of $400 billion to $500 billion over the next decade. ...
In her plan, the tax would apply to estates exceeding $3.5 million per person and at a 45% top rate. Under current law, reached in a compromise between President Barack Obama and congressional Republicans, the per-person exemption is $5.45 million and the top rate is 40%. As a result, the tax would hit about 0.4% of estates each year, up from 0.2% today. ...
One idea from Mr. Obama she hasn’t embraced is repealing what’s known as the step up in basis, the tax rule that lets capital assets pass to heirs without paying income taxes on the appreciation in value.
Democratic presidential candidate Hillary Clinton’s call Tuesday to increase taxes on the wealthy and close “loopholes” didn’t address the candidate’s own moves to shield at least part of the value of her New York home from the estate tax.
On Thursday Hillary Clinton released the much-anticipated details of her paid family-leave plan, and those details are further evidence of a stark divide between her and Bernie Sanders on the topic of taxes. The candidates agree on a lot of things, but on taxes Clinton’s and Sanders’s positions represent markedly different visions of society.
The gulf between the two Democrats on taxes is perhaps most evident in the debate over paid family leave. Sanders supports the FAMILY Act, which would require employees and employers to each contribute just 0.2 percent of wages, an average of roughly $2 per person, per week. Only wages up to $113,700 would be taxed, meaning the maximum contribution possible—even for the highest earners—would be $227.40 per year. Clinton, on the other hand, would rely on increased taxes on only the wealthiest Americans to fund paid leave. According to her campaign website, “American families need paid leave, and to get there, Hillary will ask the wealthiest Americans to pay their fair share. She’ll ensure that the plan is fully paid for by a combination of tax reforms impacting the most fortunate.”...
This paper analyzes presidential candidate Donald Trump’s tax proposal. His plan would significantly reduce marginal tax rates on individuals and businesses, increase standard deduction amounts to nearly four times current levels, and curtail many tax expenditures. His proposal would cut taxes at all income levels, although the largest benefits, in dollar and percentage terms, would go to the highest-income households. The plan would reduce federal revenues by $9.5 trillion over its first decade before accounting for added interest costs or considering macroeconomic feedback effects. The plan would improve incentives to work, save, and invest. However, unless it is accompanied by very large spending cuts, it could increase the national debt by nearly 80 percent of gross domestic product by 2036, offsetting some or all of the incentive effects of the tax cuts.
If there is a social or economic need, Democratic presidential front-runner Hillary Clinton has a tax credit to match. She’s proposed one for businesses that institute profit-sharing plans (cost: $20 billion over 10 years); another for hiring disabled veterans; and, as of last week, a tax credit worth up to $1,200 to help families defray the cost of caring for their elderly members at home (a $10 billion, 10-year item). Coming soon: changes to Social Security to benefit workers who take time off to care for the elderly.
When it comes to paying for these “targeted” benefits, plus her other promises such as universal preschool, however, the former secretary of state has a clear principle: none of the 97 percent of U.S. households that earn $250,000 or less per year will be asked to contribute higher taxes.
If this strikes you as implausible — the Democratic equivalent of the no-tax-hike pledge Republican candidates regularly impose on themselves — we agree. There is simply no way that the federal government can meet its current fiscal commitments, plus the increased demands of an aging population, and provide the new forms of middle-class relief and business tax relief Ms. Clinton promises, while tapping only the top 3 percent of earners. ...
Eventually, our leaders will have to stop pandering to the middle class, hopefully before a crisis forces them to face facts.
If you’re caring for an aging parent, deciding whether to invest in rural America or struggling to pay medical bills, Hillary Clinton has a tax credit for you.
As the Democratic presidential front-runner rolls out her policy agenda, she has repeatedly turned to the tax code as one of her favorite policy tools. It offers a way to reward behavior she wants to see more of, punish actions that she sees as harmful, and directly aid families with particular challenges.
Compared with outright spending programs, tax cuts can be simpler to administer, carefully targeted and politically easier to enact.
But there are downsides: They have a mixed record of success and often reward businesses for doing things they were going to do anyway. It can be complicated to claim the benefits. And the Internal Revenue Service, already sagging under budget cuts and the complex task of administering the Affordable Care Act, would be given even more work.
All the Republican presidential candidates say they want to make the tax code simpler. But no candidate has been more aggressive about simplicity than Carly Fiorina, who says “our tax code needs to go from 73,000 pages down to about three pages.”
The Des Moines debate will ultimately be remembered for just one moment: Clinton playing both the gender card and invoking the Sept. 11 attacks to defend her coziness with and campaign cash from Wall Street.
Here is the exchange that everyone is talking about:
Sanders attacks: “Let’s not be naive about it. Why, over her political career, has Wall Street been a major, THE major, campaign contributor to Hillary Clinton? You know, maybe they’re dumb and they don’t know what they’re going to get, but I don’t think so. … Why do they make millions of dollars of campaign contributions? They expect to get something! Everybody knows that!”
Clinton pulls out a rhetorical bazooka: “Wait a minute, he has basically used his answer to impugn my integrity. Let’s be frank here: … Not only do I have hundreds of thousands of donors, most of them small. And I’m very proud that for the first time a majority of my donors are women, 60 percent. So, I represented New York, and I represented New York on 9/11 when we were attacked. Where were we attacked? We were attacked in downtown Manhattan, where Wall Street is. I did spend a whole lot of time and effort helping them rebuild. That was good for New York. It was good for the economy and it was a way to rebuke the terrorists who had attacked our country.” ...
Clinton tried to walk it back: Later in the debate, as Twitter exploded, CBS presented her with an emblematic viewer tweet. University of Iowa law professor Andy Grewal wrote:
This year’s crop of Republican presidential candidates has pitched many ways to bust up the tax code, but one idea—converting to a value-added tax—has been anathema to both parties for decades despite being a staple worldwide.
Sens. Rand Paul of Kentucky and Ted Cruz of Texas want to replace the 78-year-old payroll tax, which is now dedicated to Social Security and Medicare, and the 106-year-old corporate income tax with a single levy. That new tax would be so big and broad-based that Mr. Cruz’s version would raise $25.4 trillion over the next decade and would become the federal government’s primary funding source, raising more than a reduced individual income tax.
Their proposals have drawn scant attention on the campaign trail, and are hardly revolutionary globally, as the U.S. is the only developed country without a value-added tax.
But some conservative critics are beginning to raise alarms. Adopting a broad tax on goods and services, they say, would make the sting of taxation less palpable and—eventually—let the U.S. adopt the revenue system that fuels the European social-welfare states.
The Republican party’s raison d’être is cutting taxes. It may even be its divine commission. God put Republicans on earth to cut taxes, the conservative columnist, Robert Novak, once said, and failure to do that means “they have no useful function”.
Republicans should pray for a new purpose. Their standing with middle-class voters is little improved from 2012. If Hillary Clinton becomes the 45th US president, it would be the first time since 1948 that the Republicans have lost three consecutive elections. Their “supply-side” orthodoxy would merit much of the blame. Big tax cuts, particularly for the wealthiest, do not work in an age of high inequality and heavy debt. Republicans need an economic agenda that respects markets while also recognising the challenges facing America and its anxious middle class. ...
Republican presidential candidates are competing to propose dramatic changes to tax policy that go well beyond the party’s previous platforms and all but ensure the issue will play a central role in the general election.
Driven by a desire to stand out in a crowded field and spark economic growth, the GOP contenders no longer just say they want to lower rates and expand the tax base. Their new ideas, once the province of right-leaning think tanks, make previous Republican plans look timid.
The US currently has seven tax brackets — and many presidential candidates think that's too many. ... Generally, politicians want to reduce the number of brackets because they believe it will simplify the tax code. That said, tax brackets are among the easiest parts of the tax code, thanks to modern software and, well, math.
An organization spun off from the Clinton Foundation has no plans to refile its tax returns due to mistakes in prior years, an official said, contradicting a highly-publicized news report earlier this year.
A series of articles published as Hillary Clinton's presidential campaign kicked off this spring noted that the Clinton Health Access Initiative, set up in 2002 as the Clinton HIV/AIDS Initiative and spun off from the foundation in 2010, had not fully complied with aspects of a conflict-of-interest agreement negotiated before the former first lady and senator became secretary of state in 2009.
The Republican presidential candidates were full of tax talk at this week’s debate. But none has a tax plan coherent enough to be the basis of a substantive discussion, let alone one that could meet the nation’s challenges.
Imagine 4.9 million new jobs. Imagine, instead of President Obama’s income stagnation, average wages rising 12.2% over the next decade. Capital investment rising 43.9%. And Americans at every level of the economy enjoying double-digit increases in after-tax income.
Imagine exports and manufacturing jobs booming. The trade deficit falling as the tax bias against American-made goods is eliminated. Imagine a 10% income tax. Every American filing his or her taxes on a postcard or an iPhone app. And abolishing the IRS as we know it.
Ben Carson is going to suspend his presidential campaign for two weeks to hawk his book! This is unprecedented! It shows he’s not serious about running for president! It proves he doesn’t understand anything about how politics works! It’s the end of the world as we know it, and nobody feels fine!
“Sen. John McCain suspended his presidential campaign for a financial crisis. Famed neurosurgeon Ben Carson is doing so for a book tour,” gasped the Huffington Post. The notion that Carson was “suspending” his campaign appeared in headlines and news stories across the Internet. ...
In the ABC report, Carson spokesman Doug Watts explained that leaving the campaign staff behind while Carson spends a few days focusing on his book tour alleviates concerns about “co-mingling from the corporate standpoint to the Federal Election Commission standpoint so it’s just better to avoid any bad appearance.”
Does anyone, post-IRS scandal, think it’s a bad idea for Republican candidates to be extra-careful about attracting the interest of Obama Administration regulatory agencies? Does everyone remember which agency IRS scandal kingpin Lois Lerner worked for, before she signed up with Internal Revenue?
My tax plan lowers the tax bracket for every American, and it dramatically simplifies the tax code for every American. To grow the American economy we must reduce our tax burden and make taxes simpler. My plan has only three rates – 2 percent, 10 percent, and 25 percent. Most Americans will be in the 10 percent bracket.
Most Republican plans brag about the idea that they will allow about half of all Americans to pay zero federal taxes. I think that is a terrible mistake. Again, most Republican plans do not require the lowest wage earners to pay anything, and some basically require half of Americans to pay zero federal taxes.
House Ways and Means Committee Chairman Paul Ryan is demanding to know whether President Barack Obama, as part of his recent Iran deal, plans to waive tax penalties on Americans doing business there. In a letter to Obama, Ryan noted that U.S. companies and individuals doing business in countries designated as sponsors of terrorism can lose foreign tax credits and face immediate taxation on their earnings there. Ryan, who opposes the Iran deal, wants to know whether Obama plans to use his statutory authority to waive those penalties.
The IRS continues to make it clear that political campaign intervention by 501(c)(3) organizations including churches is absolutely prohibited. ... Of course when it comes to such a prohibition, the devil is in the details. ”Certain activities may not be prohibited depending on the facts and circumstances”. As we head into a new election season, it is worth looking at some of those devilish details.