AHCA got no vote yesterday. The House leadership postponed the much-anticipated vote when it couldn't secure enough GOP support for passage. The American Health Care Act would eliminate Affordable Care Act tax penalties for those who choose not to purchase health insurance, provide tax credits to offset a share of the cost of medical bills, and cut taxes on high-income households and companies in the health industry. Yesterday was the seventh anniversary of the signing of the Affordable Care Act. Last night, President Trump issued an ultimatum to the House through OMB Director Mick Mulvaney: Vote up or down on the AHCA today, or they’ll be “stuck with Obamacare."
Maybe it’s just as well, given the latest CBO score. The Congressional Budget Office released its updated cost estimate of the AHCA. The bill, with its manager’s amendment, now reduces the deficit by only $150 billion over 10 years (instead of $337 billion without the amendment). It would still leave 24 million additional people without insurance in 10 years. The new estimate does not include proposals to scrap required benefits of subsidized plans.
The thing about tax credits for health insurance… The New York Times explains why they might be best offered with standard benefits. University of Pennsylvania’s Mark Pauly elaborates: “If they’re going to offer a tax credit for people who are buying insurance, well, what is insurance? You have to specify what’s included.” If you don’t, a person could use a tax credit to cover aromatherapy and not chemotherapy.
As for the Trump Administration’s plan for child care tax subsidies: TPC’s Elaine Maag explains. The three new benefits include an expanded credit for low-income families, a deduction for higher income families, and a child care savings account. TPC estimates a total cost of about $11 billion a year. That’s more than twice the price of current benefits, and parents could have a harder time figuring out their best options. High-income families would benefit more than others: 70 percent of the tax savings would go to households with income of $100,000 or more.
Amazon: 1; IRS: 0. The Wall Street Journal reports (paywall) that the US Tax Court has sided with the online retailer in a dispute over transactions with a Luxembourg subsidiary. The Court finds that the IRS made “arbitrary determinations” and “abused its discretion” in reaching its $1.5 billion tax assessment against Amazon. It is not yet clear what Amazon’s final tax bill will be.
When you wish upon a star… with a tax planner… Orlando, Florida, property taxes can run up to tens of millions of dollars for giant theme parks like Disney World, Epcot, or the Wizarding World of Harry Potter. Those parks’ tax planners have had their work cut out for them, either negotiating or appealing assessments to county boards, or claiming an agricultural exemption from property taxes by having cows live on the property. ABC News shows how Rick Singh, the Orange County property tax appraiser who has raised assessments, is making their work even harder.
There’s a new way to track state tax revenue. The Urban Institute has updated its state economic monitor. You can examine inflation-adjusted total, sales, individual income, and corporate income tax revenue data for all 50 states and DC during the most recent four quarters compared with the previous four quarters. Nationally, state tax revenue decreased 0.8 percent in real terms during the four quarters of 2016 compared with one year earlier.
Governor Christie increases some tax transparency in New Jersey. He signed into a law an expansion of property tax data online. The move gives the state’s property owners a broader and deeper view of property tax bills and how they compare with those of their neighbors. Christie has still not indicated whether he’ll sign into law a bill that would require presidential candidates to release tax returns in order to be on the New Jersey ballot in 2020.
Canada’s Prime Minister released his budget. Prime Minister Trudeau plans to raise C$4.79 billion over five years with an overhaul of the country’s tax system. He devotes an additional C$523.9 million over five years to prevent tax evasion and improve tax compliance. Doing so could bring in $C2.5 billion in tax revenue. The budget does not specify changes to the taxation of personal or corporate income or capital gains.
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