Additions to the tax law name roll of [dis]honor?
Monday, February 09, 2015
The official name of the politically volatile health care reform law is the Patient Protection and Affordable Care Act. That's usually shortened to the Affordable Care Act, or ACA.
And it's popularly known as Obamacare.
That nickname came from opponents of the president's first-term legislative landmark. Later, however, ACA advocates, including the commander in chief himself, embraced the moniker.
Bothered by Bush tax cuts name: Obama's predecessor, George W. Bush, found his name appended to the tax laws he ushered through in his first term, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA). Collectively, they became known as the Bush tax cuts.
While tax cuts generally are a popular move, as debate increased over the equity of the tax laws, name was seen as pejorative.
After he left office, W himself said, "I wish they weren't called the Bush tax cuts. If they were called some other body's tax cuts, they'd probably be less likely to be raised."
Despite the pejorative presidential tags given to recent legislation, there's a long-standing tradition on Capitol Hill of honoring people by naming pieces of legislation for them.
You might be familiar with the following such tax and financial laws.
Roth IRA: This tax-free personal retirement plan was created as part of the Taxpayer Relief Act of 1997 and named for its chief legislative sponsor, the late U.S. Sen. William Roth of Delaware.
Kay Bailey Hutchinson Spousal IRA: The subsection of the Internal Revenue Code previously known as "Special Rules for Certain Married Individuals" was officially renamed after the former Republican Senator from Texas in 2013. It allows married couples that file a joint return to claim the maximum deduction for each spouse's qualified contribution to an individual retirement plan.
Pease Rule: This is the phase out of itemized deductions for higher income earners, named after former Rep. Donald Pease (D-Ohio), who pushed for the law in 1990. The rule itself was phased out under the Bush tax cuts, but was reinstated as part of the fiscal cliff bill, officially known as the American Taxpayer Relief Act of 2012.
Coverdell Education Savings Account: This tax-favored school expenses savings account was revamped and renamed for its primary champion in the U.S. Senate, the late Sen. Paul Coverdell of Georgia.
Stafford Loan: This low-cost student loan was renamed in 1988 to honor the late Robert T. Stafford, a U.S. Senator from Vermont, whose work on higher education reform was respected by his Capitol Hill colleagues.
Bowles-Simpson Plan: This proposal is named for former Clinton Administration Chief of Staff Erskine Bowles and former U.S. Sen. Alan Simpson (R-Wyoming) who co-chaired an Obama-selected panel charged with finding ways to reduce the deficit and reform our tax system.
Dodd–Frank Wall Street Reform and Consumer Protection Act: This regulatory reform of the nation's financial services industry gets its name from its former U.S. Senate champions Chris Dodd of Connecticut and Barney Frank of Massachusetts.
Volcker Rule: This component of Dodd-Frank is named for former Federal Reserve Chairman Paul Volcker. This rule separates investment banking, private equity and proprietary trading (hedge fund) sections of financial institutions from their consumer lending arms.
Buffett Rule: This proposal, also known as the Fair Share Tax in Obama's fiscal 2016 budget, would institute a 30 percent minimum tax rate for individuals who make $1 million or more. It's named after Warren Buffett, the Omaha, Neb.-born financier who made headlines in 2011 when he revealed that under the current tax system his effective tax rate was lower than that paid by his secretary.
Now, as I noted last week at my other tax blog, there are a couple of other tax proposals that could be added to the tax law name roll of honor, or dishonor in a couple of cases.
Joining the Buffett Rule in Obama's latest budget are the Romney IRA Limitation proposal and the Gingrich-Edwards self-employment tax structure rule.
The Romney rule targets those who accumulate huge balances in tax-favored retirement accounts, an issue that came up in the 2012 presidential campaign when it was learned that then-Republican candidate Mitt Romney had at least $21 million in an IRA.
The self-employment tax proposal is named after former presidential candidates Newt Gingrich, a Republican, and John Edwards, a Democrat, both of whom used a business structure loophole to avoid paying payroll taxes on much of their earnings.
Only Buffett is specifically named in Obama's budget, but every tax geek knows who's the political celebrity target of the the other provisions.
Also over at Bankrate last week, I looked at the Internal Revenue Service decision to waive certain penalties connected to tax subsidies used by some recipients of Obamacare.
Yep, that brings us full circle in this tax law name game.
I typically post my additional tax thoughts at Bankrate Taxes Blog on Tuesdays and Thursdays. Last week I also posted on Friday about the brief TurboTax trouble with tax e-filings.
If you miss the posts there, check for highlights and links here at the ol' tax blog the following weekend ... or a bit later if my Saturday and Sunday were too crammed.
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