Senate Republicans may keep an ACA tax or two. Negotiations over the Senate’s health bill continue, but Bob Corker of Tennessee says his colleagues may retain the Affordable Care Act’s 3.8 percent net investment tax and its 0.9 percent Medicare surtax on those making $200,000+ (or couples making $250,000+). Keeping these ACA taxes would give the GOP about $200 billion to help boost premium subsidies or soften Medicaid cuts but would make tax reform more complicated. The GOP has also decided to establish pre-tax health savings accounts to pay insurance premiums. (Health savings accounts tend to disproportionately benefit those with higher incomes).
Why not cut taxes for middle-income households instead of the rich? TPC’s Howard Gleckman asks why Hill Republicans insist on tax cuts for the highest income households. It would be more equitable and help counter Democratic attacks if they paid less attention to repealing those ACA taxes and focused more on cutting taxes for those who’d be hit by Medicaid cuts or lower government insurance subsidies under the GOP bills.
But there will be tax cuts somewhere, says the White House. The Trump Administration isn’t certain that the Better Care Reconciliation Act will eliminate those ACA taxes, but there’s always tax reform. National Economic Council director Gary Cohn says: “If we can’t cut them in the Obamacare bill, we are still actively involved in tax and tax legislation."
About the debt limit. The Congressional Budget Office says the nation will run out of borrowing authority by “mid-to-late October.” One more item for the fall to-do list.
Oregon reaches a budget deal. Governor Kate Brown and legislative leaders have agreed to a transportation spending package. It would raise $4 billion in new taxes and fees over eight years including a 10 cents per gallon boost in the gas tax over the period and a 0.5 percent tax on new car sales. The budget also includes a statewide employee-paid payroll tax to fund mass transit, a $15 tax on some bike purchases, and tiered vehicle registration and title fees.
Romania’s ruling party has a tax overhaul plan. The Social Democrats released plans to eliminate in 2018 the nation’s flat 16 percent tax on income and profits. This could cause a little chaos. Not only would the plan reduce revenues but Romania’s tax administration is plagued by an unpredictable business environment, vague legislation, slow bureaucracy, and corruption.
Congress will be in recess next week in observance of Independence Day. The Daily Deduction will post next Wednesday, and return to its regular schedule on Monday, July 10.
