Kaine Proposed 1 Percent Tax Surcharge To Balance Virginia’s Budget

Virginia “Experienced Serious Budget Shortfalls” Because Of The Recession. From FactCheck.org: “Virginia adopts a new budget every two years, and amendments are added to it in the odd year to square the numbers. There’s no question that Virginia experienced serious budget shortfalls during the recession due to much lower-than-anticipated revenues. But the shortfall was closed by the end of the biennium. The same Virginian-Pilot story in which Kaine talks about a $3.7 billion shortfall, notes that the stimulus provided $1 billion in budget relief, and that lawmakers were forced to cut $2.7 billion to balance the budget, as required by the state constitution. Responding to the ad on Nov. 10, Kaine told WVEC ABC 13: ‘I left office with two balanced budgets that I submitted because you have to, by law, submit balanced budgets.’” [FactCheck.org, 11/15/11]

Kaine Proposed Replacing Car Tax With 1 Percent Personal Income Tax Surcharge To Help Balance “Recession-Wracked” Budget. From PolitiFact: “The Allen campaign, in a website post, backed Allen’s statement by citing news articles about a proposal Kaine unveiled in December 2009 as part of his farewell biennial budget proposal for 2010-2012. Kaine called for adding a 1 percent income tax surcharge and giving all proceeds to localities in return for them scrapping the car tax they levy on personal vehicles. Legislators in 1998 adopted a five-year plan to phase out the personal property tax on most cars and reimburse localities for their lost revenues. But the program was more expensive than anticipated and legislators eventually capped the state reimbursement at $950 million a year. The remaining share is paid by vehicle owners. Ending the car tax would mean the state wouldn’t have to provide the annual $950 million payment to localities, Kaine said in a speech to the General Assembly’s money committees. Kaine wanted to use the savings to help balance the state’s recession-wracked budget. News articles from the time said Kaine’s policy would raise the maximum state income tax rate from 5.75 percent to 6.75 percent. That maximum rate applies to all taxable income above $17,000 after deductions and exemptions are taken into account.” [PolitiFact.com, 8/3/12]

Income Tax Proposal Was Coupled With Tough Cuts. From the Richmond Times-Dispatch: “Outgoing Gov. Timothy M. Kaine is proposing a 1 percent increase in the state income tax to offset a proposed elimination of Virginia’s despised local car tax. The tax increase, which would raise $1.9 billion annually for localities, was the most striking aspect of the 2010-2012 budget plan that Kaine laid out for state lawmakers yesterday. In seeking to close a revenue shortfall that he projects to hit $4.2 billion by 2012, Kaine also is proposing cuts to services such as Medicaid, public education and public safety, along with 664 layoffs of state employees and a reduction in the commonwealth’s contribution to the state pension system.” [Richmond Times-Dispatch via Nexis, 12/19/09]

Rejecting 1 Percent Tax Increase Meant Cutting $1.9 Billion More From State Spending. From the Richmond Times-Dispatch: “Rejecting Kaine’s tax-increase proposal would mean that [incoming Republican Gov. Bob] McDonnell and Republican lawmakers would have to come up with a way to slice an additional $1.9 billion from state spending over two years, on top of the additional cuts announced yesterday.” [Richmond Times-Dispatch via Nexis, 12/19/09]

Refusal To Raise Taxes Meant The Budget Gov. McConnell Signed Into Law Had Deep Cuts To Education, Health Care, And Public Safety. From the Washington Post: “The Virginia General Assembly adjourned its annual legislative session Sunday evening after adopting a two-year, $82 billion budget that cuts millions from education, health care and public safety — curtailing state spending more aggressively than any in generations while fulfilling the new Republican governor’s promise not to raise taxes. The trade-off for holding firm against a tax increase to plug a $4 billion hole was a spending plan that cuts deeply into virtually every area of state responsibility.” [Washington Post, 3/15/10]

Affordable Care Act Does Not Raise Taxes On Most Americans – And Includes Tax Credits For Millions

Affordable Care Act “Will Provide More Tax Relief Than Tax Burden” For Middle Class. According to the Washington Post fact checker Glenn Kessler: “The health law, if it works as the nonpartisan government analysts expect, will provide more tax relief than tax burden for middle-income Americans.” [WashingtonPost.com, 7/6/12]

FactCheck.org: “A Large Majority Of Americans Would Not See Any Direct Tax Increase From The Health Care Law.” According to FactCheck.org: “It’s certainly true that the health care law would raise taxes on some Americans, particularly those with higher incomes. The law includes a Medicare payroll tax of 0.9 percent on income over $200,000 for individuals or $250,000 for couples, and a 3.8 percent tax on investment income for those earning that much. The Joint Committee on Taxation estimated that the biggest chunk of revenue — $210.2 billion — comes from those taxes. There are other taxes in the health care law — including an excise tax on the manufacturers of certain medical devices and on indoor tanning services. The health care law included $437.8 billion in tax revenue over 10 years, according to the Joint Committee on Taxation‘s calculations. Republicans tend to add in fees on individuals who don’t obtain health insurance (which the Supreme Court now agrees can be considered taxes) and businesses that don’t provide it to bump that up to about $500 billion. Some taxes, such as those on medical devices, may or may not be passed on to consumers in the form of higher prices, but a large majority of Americans would not see any direct tax increase from the health care law.” [FactCheck.org, 6/28/12]

Affordable Care Act Includes Tax Credits For Millions Of Americans. According to Families USA: “We found that an estimated 28.6 million Americans will be eligible for the tax credits in 2014, and that the total value of the tax credits that year will be $110.1 billion. The new tax credits will provide much-needed assistance to insured individuals and families who struggle harder each year to pay rising premiums, as well as to uninsured individuals and families who need help purchasing coverage that otherwise would be completely out of reach financially. Most of the families who will be eligible for the tax credits will be employed, many for small businesses, and will have incomes between two and four times poverty (between $44,100 and $88,200 for a family of four based on 2010 poverty guidelines).” [FamiliesUSA.org, September 2010]

Individual Mandate Lowers Premiums For Everyone, But Few Americans Will Face Penalties

Individual Mandate Takes Effect In 2014. According to the Congressional Budget Office: “Beginning in 2014, the Patient Protection and Affordable Care Act (Public Law 111-148), in combination with the Health Care and the Education Reconciliation Act of 2010 (Public Law 111-152), requires most residents of the United States to obtain health insurance and imposes a financial penalty for being uninsured. That penalty will be the greater of a flat dollar amount per person that rises to $695 in 2016 and is indexed by inflation thereafter (the penalty for children will be half that amount and an overall cap will apply to family payments) or a percentage of the household’s income that rises to 2.5 percent for 2016 and subsequent years (also subject to a cap).” [CBO.gov, 4/30/10]

CBO: Majority Of Uninsured Americans Will Not Face The Individual Mandate Penalty. From the Congressional Budget Office: “The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have estimated that about 30 million nonelderly residents will be uninsured in 2016, but the majority of them will not be subject to the penalty tax. Unauthorized immigrants, for example, who are prohibited from receiving almost all Medicaid benefits and all subsidies through the insurance exchanges, are exempted from the mandate to obtain health insurance. Others will be subject to the mandate but exempted from the penalty tax—for example, because they will have income low enough that they are not required to file an income tax return, because they are members of Indian tribes, or because the premium they would have to pay would exceed a specified share of their income (initially 8 percent in 2014 and indexed over time). CBO and JCT estimate that between 18 million and 19 million uninsured people in 2016 will qualify for one or more of those exemptions. Of the remaining 11 million to 12 million uninsured people, some individuals will be granted exemptions from the penalty because of hardship, and others will be exempted from the requirement on the basis of their religious beliefs.” [CBO.gov, 9/19/12]

Only About Six Million People – Just 2 Percent Of Population — Will End Up Paying The Penalty. From the Congressional Budget Office: “After accounting for those who will not be subject to the penalty tax, CBO and JCT now estimate that about 6 million people will pay a penalty because they are uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf) and that total collections will be about $7 billion in 2016 and average about $8 billion per year over the 2017–2022 period.” [CBO.gov, 9/19/12]

Individual Mandate “Leads To Lower Premiums And More Stable Insurance Markets.” According to the Urban Institute: “’In addition, the consumer protections introduced by the ACA, which will guarantee issue of insurance products and prohibit premium variations due to health status and claims experience, could lead some of those currently healthy and insured in these markets to leave them in the absence of the coverage requirement. By encouraging the currently insured healthier individuals to stay in these markets and attracting newly insured healthy individuals into them as well, the individual responsibility requirement leads to lower premiums and more stable insurance markets than would be the case without it. We find that premiums in the nongroup market would be 10 to 20 percent higher on average without the individual coverage requirement.” [Urban.org, March 2012]

Individual Penalty Payments “Tiny” Compared To President Obama’s Previous Tax Cuts. According to FactCheck.org, the increased revenue from penalty payments by individuals who do not obtain health insurance represents “a tiny future increase compared with the tax cuts Obama has already delivered, including an estimated $120 billion in 2012 alone from the 2 percentage point cut in payroll taxes.” [FactCheck.org, 5/17/12]

Many Small Businesses Are Eligible For Tax Credits Under The Affordable Care Act 

Affordable Care Act Offers Tax Credits To Many Small Businesses. According to a report from Small Business Majority and Families USA: “Congress included in the Affordable Care Act a significant new tax credit for small business owners who provide their workers with health insurance. Under this new tax credit, businesses that have fewer than 25 full-time workers and average wages of less than $50,000 are now eligible to receive a tax credit of up to 35 percent of the cost of the health insurance that they provide for their workers. To qualify for the tax credit, small businesses must cover at least 50 percent of each employee’s health insurance premiums. In 2014, the size of the credit will increase to cover up to 50 percent of the cost of health insurance provided to workers.” [SmallBusinessMajority.org, May 2012]

• More Than 3.2 Million Small Businesses Eligible For ACA Tax Credit. According to a report from Small Business Majority and Families USA: “Our analysis found that more than 3.2 million small businesses, employing 19.3 million workers across the nation, will be eligible for this tax credit when they file their 2011 taxes. In total, these small businesses are eligible for more than $15.4 billion in credits for the 2011 tax year alone, an average of $800 per employee.” [SmallBusinessMajority.org, May 2012] 

ACA Requires Businesses With More Than 50 Employees To Provide Affordable Coverage Or Pay A Fee. According to a report from Small Business Majority and FamiliesUSA: “While the Affordable Care Act created this new tax credit to help small business owners and workers, it does not force these small business owners to provide coverage for their workers. There are no employer mandates in the law, and there are no employer responsibility requirements at all for businesses with fewer than 50 workers, which account for 96 percent of all firms in the United States. Starting in 2014, businesses with 50 or more workers that do not offer coverage or that offer only unaffordable coverage to their workers will be assessed a fee if one or more of their workers receives a federal individual premium tax credit to purchase coverage in an exchange.” [SmallBusinessMajority.org, May 2012]

GOP Argument That Obamacare Will “Kill Jobs” Has Been Debunked

Ad cites National Federation of Independent Business study claiming a tax in the Affordable Care Act will cost between 125,000 and 249,000 private-sector jobs.

FactCheck.org: NFIB “Isn’t A Neutral Source” On Health Care Reform. From FactCheck.org: “NFIB isn’t a neutral source on this issue — it is opposed to the law, and filed a lawsuit challenging its constitutionality.” [FactCheck.org, 2/21/12]

FactCheck.org: “Job-Killing” Claim Is “Health-Care Hooey.” From FactCheck.org: “The exaggerated Republican claim that the new health care law ‘kills jobs’ was high on our list of the ‘Whoppers of 2011.’ But the facts haven’t stopped Republicans and their allies from making the ‘job-killing’ claim a major theme of their campaign 2012 TV ads. […] All of this is health-care hooey, aimed at exploiting public concern over continuing high unemployment, with little basis in fact. As we’ve said before (a few times), experts project that the law will cause a small loss of low-wage jobs — and also some gains in better-paid jobs in the health care and insurance industries. It’s also expected that more workers will decide to retire earlier, or work fewer hours, when they no longer need employer-sponsored insurance and can obtain it on their own with help from federal subsidies. But that just means fewer people willing to work — and it will free up jobs for those who want them. If anything, that could reduce the jobless rate.” [FactCheck.org, 2/21/12]

NFIB Study Counts Companies With Up To 500 Employees As “Small Businesses” And Doesn’t Account For Job Gains. From FactCheck.org: “The group says that a premium tax on insurers would increase premiums. And if the increase was 2 percent to 3 percent, NFIB’s model projects a loss of jobs between ‘125,000 to 249,000 jobs in 2021, with 59 percent of those losses falling on small business.’ Keep in mind, NFIB defines ‘small businesses’ as firms with fewer than 500 employees. Not everyone would agree that a firm with hundreds of workers is ‘small.’ Furthermore, that estimate doesn’t account for any job gains in other employment sectors.” [FactCheck.org, 2/21/12]

Kaine Said He’s Open To Tax Discussion – Not That He’s Pushing For Higher Taxes On The Poor

When the ad’s narrator says that “Kaine’s considering a new tax on those who can least afford it,” on-screen text displays a quote from an Atlantic Wire article that says, “Now Kaine’s in favor of raising taxes on poor people.”

Crossroads GPS Cites An Article About Kaine’s Debate Statement That He’d Be “Open To A Proposal” Regarding Minimum Tax Levels. From the Atlantic Wire:

In a debate between Kaine and Allen Thursday, NBC News’ David Gregory asked Kaine, “Do you believe that everyone in Virginia should pay something in federal income tax?” […]

Kaine: Well, everyone pays taxes! I mean, the statistics that have come out..

Gregory: I’m asking about federal income taxes.

Kaine: I would be open to a proposal that would have some minimum tax level for everyone. But I do insist, many of the 47 percent that Gov. Romney was going after pay a higher percentage of their income in taxes than he does.

Oops. Now Kaine’s in favor of raising taxes on poor people.

[Atlantic Wire, 9/20/12]

Kaine Clarified That He Does Not Favor Increasing Taxes On Low-Income Americans. From The Hill: “After the debate, Kaine sought to clarify his remarks by arguing that he was saying he didn’t want to take any proposals off the table, not that he supported tax increases on low-income earners — a view expressed more often by conservative Republicans like Rep. Michele Bachmann (R-Minn.) than any Democrats. ‘David asked me a question which is, would I be open to a discussion about something broader like that, and I said sure, I’d be open to it. It shouldn’t be news that somebody wants to go into the Senate that is willing to start with a position of openness and a dialogue,’ he told The Hill before pointing to his own record as evidence that he didn’t support raising taxes on low-income earners.” [The Hill, 9/20/12]