More Lipstick on a Pig—The Van Hollen/Booker Tax Cut Plan

​The following data is from an analysis prepared by the Tax Foundation.

The analysis pointed out:

• Senators Chris Van Hollen (D-MD) and Cory Booker (D-NJ) have each introduced new tax plans that would cut income taxes for lower- and middle-income taxpayers and raise them for the highest-income taxpayers and corporations.
• Senator Van Hollen's plan would slightly reduce federal tax revenue, losing $86 billion over the 10-year budget window on a conventional basis.
• Taxpayers in the middle quintile would see the largest increase in after-tax income of 3.9 percent, while taxpayers in the top 1 percent would see a 9.7 percent decrease.
• Van Hollen’s plan does the following:
  • Set an exemption equal to $46,000 for single filers and $92,000 for joint filers.
  • Qualifying taxpayers, defined as those with income of 175 percent or less of the exemption, would calculate their ordinary tax liability and their tax liability under a 25.5 percent tax with the "cost of living" exemption, paying the lesser amount.
  • To finance this tax cut, the plan would impose a new surtax on high-income taxpayers: 5 percent on income above $1 million ($1.5 million for joint filers), 10 percent above $2 million ($3 million for joint filers), and 12 percent above $5 million ($7.5 million for joint filers).
  • The maximum tax exemption and surtax thresholds would all be adjusted for inflation.
• Senator Booker's plan would significantly reduce federal tax revenue, losing up to $6.7 trillion over the 10-year budget window on a conventional basis without accounting for the unspecified business tax increases.
• Senator Booker’s does the following:
  • Increase the standard deduction to $37,500 for single filers, $75,000 for joint filers, and $56,250 for head of household filers.
  • It would expand refundable tax credits by increasing the child tax credit (CTC) to $4,320 for children under 6 and $3,600 for children ages 6 to 17, while providing an additional $2,400 bonus in the year a child is born and making it fully refundable.
  • The expanded CTC amounts would begin phasing down to the current-law CTC amounts at $150,000 for joint filers and $112,500 for single filers. The CTC values would be inflation- adjusted.
  • The earned income tax credit (EITC) would triple for workers without qualifying children by increasing the phase-in rate to 15.3 percent and slightly expanding the income thresholds. The age range for the credit would expand to cover those ages 19 to 24 and over 65.
  • To partially offset the cost of the expanded standard deduction and refundable tax credits, Booker has specified that the tax rates for the top two tax brackets would increase from 35 percent and 37 percent currently to 41 percent and 43 percent.
  • He has announced, but not specified, additional tax increases, including increasing the corporate income tax rate and the stock buyback excise tax rate.
• Though some lower- and middle-income benefit through lower marginal tax rates under both plans, taxpayers would face worse incentives through higher marginal tax rates. On net we, expect both plans would reduce long-run GDP.

CONCLUSION

https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2025/
The Tax Foundation also published this discussing who pays federal income tax: 
 

• New Internal Revenue Service data for tax year 2022 shows the US federal income tax system continues to be progressive as high-income taxpayers pay the highest average income tax rates.
• Average tax rates for all income groups remained lower in 2022, five years after the Tax Cuts and Jobs Act (TCJA), than they were in 2017 prior to the reform.
• In 2022, taxpayers filed 153.8 million tax returns, reported earning nearly $14.8 trillion in adjusted gross income(AGI), and paid $2.1 trillion in individual income taxes.
• The average income tax rate in 2022 was 14.5 percent. The top 1 percent of taxpayers paid a 23.1 percent average rate, six times higher than the 3.7 percent average rate paid by the bottom half of taxpayers.
• The top 1 percent’s income share fell from 26.3 percent in 2021 to 22.4 percent in 2022, and its share of federal income taxes paid fell from 45.8 percent to 40.4 percent.
• The top 50 percent of all taxpayers paid 97 percent of all federal individual income taxes, while the bottom 50 percent paid the remaining 3 percent.

People earning below $55,000 are in the bottom 50% and that is the group that pays the remaining 3%.  Of course, neither of the above plans consider that most people making $55,000 or less pay more in payroll taxes than income taxes even under their plans.

Both plans further increase the U.S. debt and neither plan addresses:
 

• The problems with income tax evasion—over $1 trillion per year.
• The negative impact of the income tax on our exporters and the subsidy it gives importers who compete against U.S. produced goods and services.
• Consumption based taxes increase GDP growth more than income-based taxes.
• They don’t fix the Social Security trust problem that the FAIRtax does.

THE FAIRTAX IS THE ANSWER. 

The FAIRtax is a national retail sales tax on new retail goods and retail services which provides a family credit so that all purchases up to the poverty level for each family are not taxed. There is no withholding from your paycheck, and YOU NEVER HAVE TO FILE A TAX RETURN TELLING THE GOVERNMENT HOW MUCH YOU EARNED AND HOW MUCH YOU SPENT, AND YOU’LL NEVER BE HARASSED BY THE IRS EVER AGAIN.

Many of you have labored tirelessly for freedom from the federal income tax and the IRS.  You deserve a great deal of credit for your efforts to educate the American people on the need to fund the American government in a way that is good for America and returns freedom to the American people.

It is imperative, though, that we don’t replace the current income tax and the IRS with an alternative system that can still be manipulated by the Ruling Elite.  We must let Congress and the President know that the best way to replace the income tax and the IRS is with the FAIRtax. 

Make no mistake about it.  The FAIRtax is a grave threat to the Ruling Elites.  It will strip them of their power and their ability to control us though the tax system.  Their opposition to the FAIRtax will be fierce and unrelenting.  And don’t think for an instant that they won’t use half-truths, deception and downright lies in their desperate attempt to hang on to their power. 

However, with the support of this President, we can finally eliminate the income tax and the IRS!!!

Of course, the best course of action is to not only repeal the income tax and abolish the IRS but to repeal the 16^th Amendment as well so no future administration can ever shackle the American people with an income tax again.

We must come together and ensure that real tax reform, the FAIRtax, is not subverted by the Elites in D.C.

This will take the diligent efforts of all of us.  We need your financial assistance, and we need your grass roots assistance.

If you have contacts that will allow us to get more information to President Trump about the FAIRtax please let us know.

Please email us at info@fairtax.org and we will give you some options on how you can best help us. 

At a minimum, please call your Congressional representative and ask if he or she supports the FAIRtax.  If so, thank him/her for their support and suggest they become a cosponsor of HR-25 if they’re not one already.  If not, ask why not.  If your representative claims to be unfamiliar with the FAIRtax, offer to have someone come to their office and explain it to them. 

Please go to this link to invest in AFFT and help us pass the FAIRtax.  It’s an investment in your and your family’s future. 

THE SOLUTION—PASS THE FAIRTAX!

Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations?  The only way that they will is if the rest of us demand it!
  
Isn’t it time to end this ludicrous tax collection system and the IRS?

HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES

By contributing (investing) $10.40 per month, you help provide a financial base to AFFT.  If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
 
Please go to this link to invest in AFFT and help us pass the FAIRtax.  It’s an investment in your and your family’s future.