Daily Deduction Say so long to three ACA taxes?
Renu Zaretsky
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A vote today? Bills to fund the government (and de-fund the ACA) in fiscal year 2020 in the House. Politico reports that House Democrats plan to split all 12 fiscal 2020 spending bills into two packages for floor consideration today, The deal  eliminates three health care-related taxes on medical devices, health insurers and high-cost “Cadillac” insurance plans—which will drastically reduce funding provisions for the Affordable Care Act. Lawmakers also agreed to include $1.375 billion for physical barriers along the southern US border for fiscal year 2020, effectively the same amount funded in 2019. Should the bills pass, President Trump must then sign them by December 20, before current stopgap funding expires. 

And in the Senate. Roll Call reports that Democrats and Republicans aim to have a tax package accompany government-funding legislation for votes this week. With the hope of prompting compromise, Sens. Michael Bennet, (D-Colorado), and Mitt Romney (R-Utah) have offered a bill that would expand the child tax credit and offer technical corrections to the Tax Cuts and Jobs Act. Their bill would also permanently repeal the medical device tax enacted under the Affordable Care Act.

Speaking of Utah… The state legislature passed a massive tax bill last week but the bill did not earn two-thirds majority support. It is subject to citizen referendum, and yesterday its opponents filed that formal challenge to the legislation. They include former Republican state lawmaker and staff from Utahans Against Hunger. For the referendum to qualify, it must earn over 115,869 valid signatures across the state by January 21.

ITEP: 400 of America’s largest corporations paid an effective federal tax rate of 11 percent on their profits last year. The Institute of Taxation and Economic Policy released its report with the findings yesterday. The Tax Cuts and Jobs Act reduced the corporate tax rate from 35 percent to 21 percent.

“Paul Volcker taught us how tax and monetary policy can work together to enhance growth.” TPC’s Gene Steuerle reflects on the legacy of the former chair of the Federal Reserve who passed away last week. By restoring the positive costs for borrowing, Volcker’s interest rate hikes in the late 1970s and 1980s “helped channel funds away from investments that produced low or even negative economic returns to society.” Steuerle concludes that policymakers should take heed of Volcker’s public finance lessons. If they don’t, "the nation’s borrowing juggernaut will remain well fueled and continue to weaken future economic growth by encouraging investments with low or negative real private economic returns.”

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