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CBO scores the coverage reductions. The Congressional Budget Office projects that 22 million more people would be uninsured by 2026 under the draft Senate bill. The plan’s tax cuts would cut federal revenues by about $700 billion over 10 years but reduce the deficit by about $300 billion over the period.
And TPC scores the tax cuts. A new analysis finds that nearly 45 percent of the benefits of the tax cuts would go to the highest-income one percent of households—those making nearly $900,000 or more in 2026. The plan would boost their after-tax income by an average of $45,000, or 2 percent. Middle-income households would get a tax cut of $280, or 0.4 percent of their after-tax income. TPC’s Howard Gleckman explains it all.
What are the trade-offs between tax cuts and health care under the AHCA? Vox has a graphic feature that explains this fact about the American Health Care Act: The cost of “400 families gaining a tax cut are offset by ending a program that covers three-quarters of a million of low-income Americans.”
McConnell adds an individual mandate. Scrambling for votes, and looking to hold down the number of newly-uninsured under his health plan, Senate Majority Leader Mitch McConnell added an individual mandate. Those who buy insurance after going bare for 63 days would have to wait six months for coverage.
Defending CBO… While lawmakers waited for the Congressional Budget Office score of the Senate’s health bill, TPC’s Rudy Penner had a warning and a defense of the CBO. Penner, a former director of the agency, writes, “The Congressional Budget Office is under unprecedented political attack. These criticisms are overblown, and likely will prove to be counterproductive—even to those making them….It would be a miracle if CBO’s coverage forecast is precisely accurate, but it would also be a miracle if the difference in coverage between current law and the proposed legislation was not in the millions. That projection is worth knowing, both for policymakers and the public.”
Is a 28 percent corporate tax rate the best bet? Given the Republicans’ difficulties in reaching agreement on how to pay for desired tax cuts, a more modest reduction in the current 35 percent corporate rate may be the most likely outcome. Eliminating 54 corporate tax breaks could generate enough revenue to cut the rate to 28.5 percent without adding to the deficit, according to the Tax Foundation. In 2012, Treasury estimated that the lowest plausible revenue-neutral rate would be 28 percent, notes TPC Director Mark Mazur. But he added that multinational companies might not say “sign me up for that.” Most already pay lower effective rates.
Tennessee’s gas tax is bringing in more revenue than expected. The state’s collections of gas and diesel fuel tax for May were $8.9 million above estimates and a rate increase goes into effect on Saturday. The state also collected $44 million more than expected in sales tax.
There’s an over-tax mistake in Minnesota. Enbridge, an oil company, has multiple petroleum lines running through six Minnesota counties. When the state changed the way it taxes energy companies in 2012, Enbridge was hit with a bigger property assessment. The oil company has gone to state tax court claiming the assessment was too high and demanding a refund of millions of dollars. If it wins, those six counties may be on the hook. Clearwater County, for example, could have to pay back $7 million--more than its entire 2017 budget.
Are Australia’s banking taxes scaring away investors? Two of the country’s major banks say yes, but new bank taxes have broad popular support, given recent stories of banking misconduct amid high profitability. The state of South Australia just announced a new A$370 million ($280 million) tax and the federal government just levied an A$6.2 billion bank tax. The federal tax will help close its budget deficit. South Australia wants to fund job-creation programs.
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