The voices of Tax Policy Center's researchers and staff
There are tax information troubles for ACA enrollees. When it comes to the Affordable Care Act and filing taxes, “sorting through all the necessary paperwork is hard to do, even for those of us whose day jobs are in tax policy,” writes TPC’s Ellen Steele, a tax-preparing volunteer with Community Tax Aid. Making things more difficult: Around 800,000 people who signed up for coverage through HealthCare.gov received incorrect tax information. They’ll need to delay filing until the feds send corrected information in early March. That could pose a hardship for low-income families who count on big refunds.
But those who owe a penalty for having no insurance get another chance to enroll through filing season. The regular ACA enrollment period for 2015 ended February 15. But the Administration announced a special enrollment period from March 15 through April 30 to help maximize participation. Tomorrow, TPC and the Brookings Institution will examine the links between taxes and ACA enrollment at a panel event that will be webcast. Speakers include H&R Block’s Mark Ciaramitaro, Center on Budget and Policy Priorities’ Tara Straw, TPC’s Len Burman, and the Urban Institute’s Stan Dorn.
Tax collections aren’t making the cut in Wisconsin. Governor (and presidential hopeful) Scott Walker cut taxes on families and business by $541 million last year, and brags that taxes have been slashed by $2 billion since he took office in 2011. But last year’s estimated $1 billion surplus has turned into a $283 million shortfall. Wisconsin still requires a balanced budget, so the Governor plans to skip a $108 million debt payment in May. The math won’t get easier over the next two years: Wisconsin’s expected revenues fall $2 billion short of state agencies’ budget requests.
MEGA tax credits in Michigan mean big long-term liability for taxpayers. The Michigan Economic Development Corporation’s revised estimates of Michigan Economic Growth Authority credits—issued to companies from 1995 through 2011—show state liability of $9.38 billion until 2032. That’s because 80 percent to 100 percent of the tax credits are expected to be redeemed, instead of the earlier estimate of 35 to 50 percent. What does that drop in revenue mean for the 2015 budget? Michigan legislators plan to use much of the remaining $283.5 million surplus in the School Aid Fund to help address the state’s $456 million budget deficit.
State revenues across the country won’t jump any time soon. Urban Institute analyses of state agency revenue reports show that revenue growth will likely be “sluggish through fiscal year (FY) 2016… In FY17, states project revenue growth will return to its average post-2000 rate but remain significantly below its long term average… The estimates… provide little support for bold initiatives and together with other evidence on spending may suggest that many states will have trouble even meeting current needs.”
At the federal level: Will dynamic scoring help or hinder policy making? The House voted last month to require the Congressional Budget Office and the congressional Joint Committee on Taxation to include macroeconomic effects in some official budget scores. It’s a controversial requirement so TPC is hosting an online policy forum on the topic. The Urban Institute’s Rudy Penner, who directed the CBO from 1983 to 1987, is the first to weigh in, noting “The most valuable contribution of [dynamic] scoring occurs when it shows that a policy expected to cost very little the first year becomes very expensive in future years. The numbers may be somewhat inaccurate, but the time pattern of costs is unlikely to be far off.”
It’ll be a busy week on the Hill. Tomorrow, the Senate Finance Committee will hold a hearing on tax reform, growth and efficiency. On Wednesday: The House Ways & Means Subcommittee on Social Security will hold a hearing on the solvency of the Disability Insurance Trust Fund, and the Senate Budget Committee will hold a hearing on the nation’s debt. On Thursday: A House Oversight and Government Reform panel subcommittee will hold a hearing on the ACA, and the full oversight committee will receive an update from the Treasury Inspector General for Tax Administration. Also this week, the House may vote to expand Sec. 529 college savings plans.
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Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.