Repeal and Replace: Sooner or later. Or just later. The GOP-led Senate does not have enough votes to pass the Better Care Reconciliation Act, its version of the House’s American Health Care Act. Five GOP senators said they would not back a procedural vote on the measure this week. Senate leadership decided to delay its vote on the BCRA until after the July 4 recess. They’ll spend the time re-writing the bill and getting a new CBO score.
Why does the Senate plan cut taxes less than the House bill? The House bill cuts taxes by $1 trillion over 10 years says the Congressional Budget Office, but the Senate bill cuts taxes by $700 billion, even though tax cuts in both plans are identical. What’s going on? TPC’s Howard Gleckman explains that most of the variation is due to different insurance tax subsidy designs.
Also next month: More tax reform hearings. House Ways & Means Chairman Kevin Brady says the panel will hold two hearings in July. One will cover the benefits of tax reform for small businesses. Another will focus on benefits for families and individuals.
The IMF doesn’t seem to think US tax reform will happen. The Washington-based lender dropped its assumptions of big US tax cuts and infrastructure spending due to the plans’ political uncertainty. It reduced its forecast for US growth this year to 2.1 percent, down from 2.3 percent in April. The latest IMF economic outlook reports that the US economy will have difficulty meeting President Trump’s goal of 3 percent annual growth, given the US is already effectively at full employment.
Citadel hedge fund founder has thoughts on one of Trump’s tax ideas. Billionaire Ken Griffin says that if the nation wants to remain fiscally responsible, "we're not going to see [tax] rates as low as those proposed by the administration. We're not going to dramatically reduce rates… Our deficits are stunning.”
Maine lawmakers have to decide on a tax on high-earners by Friday. The state faces a shutdown if the legislature can’t pass a budget by Friday, reports The Wall Street Journal. Legislators must decide whether to undo a voter-approved 3 percent surtax on household income above $200,000. GOP Governor Paul Le Page says it’s a job-killer, and believes “that we’re going to shutdown Friday night.”
When you’re young and learn about taxes… Tax reform advocate Grover Norquist had a Twitter adventure the other night, quipping that Republicans are born when introduced to a sales tax—like his 8-year-old daughter after she saved only $35 for a $35 guitar. If only her school had a little tax policy in its curriculum!
Warren Buffett learned about his taxes at a young age. The billionaire investor first filed a 1040 at age 14. He shared that return with PBS NewsHour. In 1944, he owed $7 in taxes on $592.50 of paper route income, and declared $228 in interest and dividend income. He tracked business expenses too: $10 for watch repair and $35 for miscellaneous bicycle expenses.
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