On Sunday, Grover Norquist of Americans for Tax Reform said Senators Ben Nelson and Arlen Specter would violate their signed pledges not to raise taxes by voting for the health care bill, which includes $500 billion in tax increases between now and 2019. Asked before voting on cloture last night if he broke this pledge, Nelson told THE WEEKLY STANDARD: "No, they just need to go back and read it; I've read it. It says marginal tax rates." ATR's Ryan Ellis replies:
Here is the text of the Taxpayer Protection Pledge: "I, Ben Nelson, pledge to the taxpayers of the State of Nebraska and to the American people that I will: ONE oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses, and TWO oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates." Here is a link to the Tax Pledge language: http://www.atr.org/userfiles/Senate%20Pledge.pdf There are two promises in that Pledge. The first says "I won't raise income tax rates." The second says "I won't expand the income tax base on net unless it's to reduce tax rates." Each is vital. Senator Nelson is correct that he is compliant with the first half of that pledge. The Senate health care bill does not raise marginal income tax rates. However, he needs to read the second commitment in that promise. The Senate bill contains a net income tax increase in the income tax base. The full list of tax hikes with score is here: http://www.atr.org/news-comprehensive-list-tax-hikes-inbr-a4345 You can see from the CBO score that this is a net tax increase of $498 billion over a decade. This factors in the tax credits for individuals and small businesses. The net income tax increase is smaller than this (since not all the tax hikes are income tax hikes), but it is still a net income tax increase over the budget window. This is a violation of the second part of Senator Nelson's Pledge. Perhaps he should re-read the Pledge he signed--the whole Pledge.
It's worth noting that there is a marginal Medicare payroll tax increase in the Reid bill: the rate jumps from 2.9% to 3.8% for self-employed individuals making more than $200,000 (but since this is a FICA tax, not the income tax, this isn't a violation of the no "marginal income tax" hikes pledge).