Elizabeth Warren has a plan to finance Medicare for All. It includes a higher wealth tax than her earlier levy on the super-rich, an accrual capital gains tax for the top 1 percent, and a new tax on employers that currently provide health insurance to their workers. All that would pay for a plan that increases net federal health spending by about $20 trillion over 10 years—a cost estimate significantly lower than most other projections.
Who would pay for her employer tax? Warren promised “no middle class tax increases” to fund her government health insurance plan. But TPC’s Howard Gleckman takes a closer look at one element of Warren’s proposal: A new fee (or tax) on employers equal to 98 percent of their current health insurance costs. He explains how the levy punishes firms that provide generous coverage today and functions as a flat tax on workers.
Treasury keeps earnings stripping regulations, but limits the Obama-era version. The regulations are designed to curb corporate inversions, or where a US-based multinational merges with a smaller foreign company to establish residence in its partner’s lower-tax country. TPC’s Steve Rosenthal explains that “the new anti-abuse rule might be triggered only if the IRS could establish there was actually a plan to return the cash received for the note. Time will tell whether a more streamlined anti-abuse rule will work as effectively as the [older] strict 36-month rule.”
In Wisconsin, new online sales tax revenue will cut income tax revenue. State law requires that the additional sales tax revenue must be used to reduce individual income tax rates for the state’s two lowest-income tax brackets. Wisconsin’s Legislative Fiscal Bureau estimates that online vendors will remit $79.2 million for the year ending September 30, 2019. That means that after required rate cuts, income tax revenue will fall by $77.4 million.
Seattle’s income tax heads to Washington State Supreme Court. The state’s high court must decide whether Seattle can implement an income tax on high earners it approved in 2018. It will decide whether the state’s appeals court decision to allow a uniform tax across all earners is constitutional and whether income qualifies as property. If the high court rules against the city, Seattle may reconsider an unearned income tax on stock dividends, inheritances, and pensions.
A billionaire leaves high-tax New York for low-tax Florida, on paper. President Trump has decided to move his legal residence from New York—a state with a hefty income tax—to Florida, a state with no income tax. The New York Times explains why filling out a “declaration of domicile” isn’t enough to prove Florida residency to New York state auditors. Trump and related parties currently are in the midst of multiple tax disputes with New York.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.