In my opinion, Obamacare should have been voted on by the American people and let them decide not the Supreme Court.
Justice Roberts chastised President Trump for calling out that leftie Judge Tigar for making law and not following the Constitution. First, Roberts was selected by Bush II and now that we know that the Bushes voted for Hillary Clinton and not President Trump – that makes Judge Roberts a leftie. How do we know that – because Roberts broke a tie vote and put the tax on our back?
Remember when Justice Ginsbuurg – slammed Trump three times.
•“He has no consistency about him,” Ginsburg told CNN late Monday. “He says whatever comes into his head at the moment. He really has an ego. … How has he gotten away with not turning over his tax returns? The press seems to be very gentle with him on that.”
•She told the New York Times in an interview published online Sunday, “I can’t imagine what this place would be — I can’t imagine what the country would be — with Donald Trump as our president…For the country, it could be four years. For the court, it could be — I don’t even want to contemplate that.” She told Times reporter Adam Liptak that it reminded her of something her husband, Martin, who died in 2010, would have said: “Now it’s time for us to move to New Zealand.”
•When asked by Associated Press reporter Mark Sherman about a Trump victory, Ginsburg said: “I don’t want to think about that possibility.”
Trump himself called her remarks a disgrace on Tuesday, and said she should apologize to her colleagues.
Full List of Obama Tax Hikes
1. A 156 percent increase in the federal excise tax on tobacco: On February 4, 2009, just sixteen days into his Administration, Obama signed into law a 156 percent increase in the federal excise tax on tobacco, a hike of 61 cents per pack. The median income of smokers is just over $36,000 per year.
2. Obamacare Individual Mandate Excise Tax (takes effect in Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance – as defined by Obama-appointed HHS bureaucrats — must pay an income surtax according to the higher of the following:
The Congressional Budget Office recently estimated that six million American families will be liable for the tax, and as Americans for Tax Reform has pointed out, 100 percent of Americans filing a tax return (140 million filers) will be forced to submit paperwork to the IRS showing they had “qualifying” health insurance for every month of the tax year. Bill: PPACA; Page: 317-337)
3. Obamacare Employer Mandate Tax (takes effect Jan. 2014): If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. Applies to all employers with 50 or more employees.
If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346
Combined score of individual and employer mandate tax penalty: $65 billion/10 years
4. Obamacare Surtax on Investment Income (Tax hike of $123 billion/takes effect Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93
2013+ (current law)
2013+ (Obama budget)
*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations.
It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. The 3.8% surtax does not apply to non-resident aliens.
5. Obamacare Excise Tax on Comprehensive Health Insurance Plans (Tax hike of $32 bil/takes effect Jan. 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956
6. Obamacare Hike in Medicare Payroll Tax (Tax hike of $86.8 bil/takes effect Jan. 2013): Current law and changes:
All Remaining Wages
Obamacare Tax Hike
Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93
7. Obamacare Medicine Cabinet Tax (Tax hike of $5 bil/took effect Jan. 2011): Americans are no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959
8. Obamacare HSA Withdrawal Tax Hike (Tax hike of $1.4 bil/took effect Jan. 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959
9. Obamacare Flexible Spending Account Cap – aka “Special Needs Kids Tax” (Tax hike of $13 bil/takes effect Jan. 2013): Imposes cap on FSAs of $2500 (currently unlimited). Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389
10. Obamacare Tax on Medical Device Manufacturers (Tax hike of $20 bil/takes effect Jan. 2013): Medical device manufacturers 409,000 people in 12,000 plants across the country. This law imposes a new 2.3 percent excise tax on total sales, even if the respective company does not earn a profit. Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986
11. Obamacare "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI (Tax hike of $15.2 bil/takes effect Jan. 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995
12. Obamacare Tax on Indoor Tanning Services (Tax hike of $2.7 billion/took effect July 2010): New 10 percent excise tax on Americans using indoor tanning salons. Making matters worse: According to a Treasury Inspector General for Tax Administration report, the Obama IRS didn’t bother to issue compliance guidelines until three quarterly filing deadlines had passed: “By the time [IRS] notices were issued, tanning excise tax returns had been due for three quarters." Bill: PPACA; Page: 2,397-2,399
13. Obamacare elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (Tax hike of $4.5 bil/takes effect Jan. 2013) Bill: PPACA; Page: 1,994
14. Obamacare Blue Cross/Blue Shield Tax Hike (Tax hike of $0.4 bil/took effect Jan. 1 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004
15. Obamacare Excise Tax on Charitable Hospitals (Min$/took effect immediately): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by Obama-appointed HHS bureaucrats. Bill: PPACA; Page: 1,961-1,971
16. Obamacare Tax on Innovator Drug Companies (Tax hike of $22.2 bil/took effect Jan. 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980
17. Obamacare Tax on Health Insurers (Tax hike of $60.1 bil/takes effect Jan. 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993
18. Obamacare $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Tax hike of $0.6 bil/takes effect Jan 2013). Bill: PPACA; Page: 1,995-2,000
19. Obamacare Employer Reporting of Insurance on W-2 ($min/takes effect Jan. 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957
20. Obamacare “Black liquor” tax hike (Tax hike of $23.6 billion/took effect immediately). This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105
21. Obamacare Codification of the “economic substance doctrine” (Tax hike of $4.5 billion/took effect immediately). This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113
So, if you think the Democrats are good for the country – then review the following on how President Trump took away from the Democrats's tax plan and they sure don't want to talk about it:
Supreme Court meets to vote on Obamacare; Roberts likely holds key vote
By David G. Savage
Mar 06, 2015 | 2:06 PM
Supreme Court meets to vote on Obamacare; Roberts likely holds key vote
A courtroom sketch shows Solicitor General Donald B. Verrilli Jr., right, defending the Affordable Care Act before the Supreme Court this week. From left are Justices Antonin Scalia, Chief Justice John G. Roberts, and Justice Anthony Kennedy (Dana Verkouteren / Associated Press)
When the Supreme Court justices met in private Friday to cast their votes and decide the reach of President Obama’s healthcare law, the outcome probably turned on the person who spoke first: Chief Justice John G. Roberts.
When the justices meet to decide cases, they vote in order of seniority, beginning with the chief justice. But even if the court’s customs did not set that order, it would have made sense in this case. With the court’s four liberal justices clearly ready to side with the administration, and three conservatives clearly lined up in opposition, Roberts, and perhaps Justice Anthony M. Kennedy, hold the deciding votes.
At stake is whether more than 7 million low- and moderate-income taxpayers can continue to receive subsidies that make their health insurance affordable.
Roberts uncharacteristically said little when the case was argued Wednesday. But the one substantive comment he did make has received intense scrutiny from lawyers and others trying to forecast whether the healthcare law will survive or be largely unraveled.
The comment involved a legal rule for how judges should resolve questions about big, ambiguous statutes.
Obama administration lawyers argue the Affordable Care Act, when read as a whole, shows that tax subsidies for health insurance are supposed to be available nationwide. The conservative groups challenging the law say its wording — that subsidies will be provided through an "Exchange established by the State" — mandate that the aid be allowed only in the handful of states that have opted to establish their own online healthcare marketplaces, rather than those that rely on the federal government's healthcare.gov site.
When a three-judge panel of the federal 4th Circuit Court of Appeals in Virginia considered the case last year, they did not entirely agree with the administration.
“We cannot discern” just what Congress intended, said the panel, made up of Democratic appointees. But since the wording of the law was “ambiguous,” they said, the legal rule was to favor the interpretation made by the agency that administers it, in this case the Internal Revenue Service.
The rule that the interpretation by federal regulators wins in court if a law is unclear was set by the Supreme Court in 1984. It is known as the "Chevron doctrine" because it was set down in a case involving the giant oil company. The doctrine requires judges to be "highly deferential" to an agency's interpretations of statutes, the appeals court explained.
Roberts is no fan of the Chevron rule. Two years ago, in a dissent he wrote in a case involving the Federal Communication Commission, he said he had a "fundamental" disagreement with giving regulators the benefit of the doubt in all cases.
The "vast and varied federal bureaucracy" churns out "reams of regulations [that] touch almost every aspect of daily life," he said. "And more are on the way," he added, pointing at the Affordable Care Act.
Roberts said the justices should not simply defer to regulators. Their rules “warrant deference only if Congress has delegated authority to definitively interpret a particular ambiguity in a particular manner,” he wrote in the 2013 case, City of Arlington vs. FCC. Justices Kennedy and Samuel Alito said they agreed with Roberts.
The chief justice's doubts about the Chevron rule explain why Solicitor Gen. Donald Verrilli, arguing for the administration, insisted that the Affordable Care Act isn't ambiguous at all. In his interpretation, the law as written was entirely clear and left no doubt that all qualified taxpayers were entitled to a subsidy.
But late in Wednesday's argument, both Roberts and Kennedy raised the Chevron issue of deferring to regulators.
Kennedy's comment was ominous for the government's case. The law would have to be "very, very clear" to uphold the IRS rule, he said. "It seems to me a drastic step for us to say the IRS and its director can make this call" which involves having the Treasury spend billions of dollars in tax credits, Kennedy said.
When Roberts spoke, near the end of the argument, his words were more cryptic.
"If you're right about Chevron, that would indicate that subsequent administration could change that interpretation?" he asked the solicitor general.
Some saw his comment as welcome for the administration and for the principle that the voters get the last word. If the court defers to the administration and upholds the 4th Circuit's decision in this case, he may have been suggesting, a future electorate could choose a Republican president in 2016 who could limit the tax subsidies. If that's what he meant, Roberts might have been indicating a willingness to keep the law intact and let the political process play out.
But Roberts' comments could also be read to say the meaning of a law should not turn on who controls the bureaucracy. That point would echo his 2013 dissent in the FCC case, in which he quoted Chief Justice John Marshall's declaration that "It is emphatically the province and the duty of the judicial department to say what the law is."
For now, no one knows except within the court. Friday's vote decided which side has the majority. In a few weeks, whoever is writing the majority opinion — probably Roberts — will circulate a draft among the justices. Then the dissenters will go to work on an argument that they hope will persuade someone in the majority to change his or her mind.
The court is not likely to issue its decision and dissent in King vs. Burwell before the last week in June.
While Roberts voted to uphold the mandate in the ACA as a valid use of the taxing power, he found that it exceeded Congress’s powers under the Commerce and Necessary and Proper clauses.
The Supreme Court not only made the destruction of Medicaid more likely—it also handicapped future efforts to repair the damage and provide genuinely universal insurance. There are many institutional barriers facing health care reformers in the United States, and the Supreme Court is likely to continue to be one of them.
Supreme Court ObamaCare | Ruling on ObamaCare
Supreme Court ObamaCare Ruling. The Supreme Court upheld ObamaCare on June 28, 2012. The final ruling on ObamaCare was a made by Supreme Court Judge Vinson. The basic idea of the ruling was that ObamaCare was declared a tax and not a mandate, and was therefore declared constitutional. The ruling also let states opt-out of expanding Medicaid.
Explaining the Supreme Court Ruling on Obamacare
An insider’s guide to the Supreme Court’s dramatic ruling upholding the Affordable Care Act. By Jesse Wegman.
06.28.12 2:34 PM ET
Saul Loeb / AFP-Getty Images
What exactly did the Supreme Court rule?
By a 5–4 margin, in a decision (surprisingly) written by traditionally conservative Chief Justice John Roberts, the court ruled that the health-care law is constitutional.
The law’s most controversial component, known as the “individual mandate,” requires all Americans to purchase health insurance or pay a “shared responsibility payment” to the government.
On the day the law was enacted, 26 states, several individuals, and others sued to have the law struck down as a violation of the Constitution’s Commerce Clause, which gives the federal government the power to regulate commerce between the states.
In its ruling, the court held that the law could not be upheld under the Commerce Clause, which was the government’s primary argument in its support. “The Federal Government does not have the power to order people to buy health insurance,” Roberts wrote for the majority.
But wait—doesn’t that mean the law should’ve been struck down?
The Commerce Clause argument was only one of three the government made in support of the law. It also argued that the law could be considered a tax, and this is the argument the court bought.
Specifically, the court held that the individual mandate is not a “penalty,” as the health-care law identified it, but a tax, and therefore a constitutional application of Congress’s taxation power.
In accepting the tax argument, the court relied on the “well-established” principle that “if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so.”
The court then noted that the government’s argument—that the mandate represented a tax on people who choose not to buy health insurance—“makes going without insurance just another thing the Government taxes, like buying gasoline or earning income.”
In deciding to accept the government’s tax argument, the court wrote that “the question is not whether that is the most natural interpretation of the mandate, but only whether it is a ‘fairly possible’ one.”
How can the court call the mandate a tax if the law itself didn’t call it that?
The court is not bound to interpret laws exactly as they are written, but uses what it calls a “functional approach”—considering the substance of a law in addition to its formal language.
Under this approach, the court ruled that the penalty the law imposes on people who don’t buy health insurance “looks like a tax in many respects,” and that it is permissible under the court’s previous case law for several reasons: the amount of money due is “far less than the price of insurance” and it is collected by the IRS under normal means of taxation.
The court acknowledged that the mandate “is plainly designed to expand health insurance coverage,” and noted that “taxes that seek to influence conduct are nothing new”—for example, the taxing of cigarettes to discourage smoking.
Finally, the court reasoned, the mandate does not make the failure to buy health insurance unlawful. Beyond the payment to the IRS, the court explains, “neither the Act nor any other law attaches negative legal consequences to not buying health insurance.”
So am I going to have to pay more tax now?
Starting in 2016, when the “shared responsibility payment” is fully in place, the amount you would owe for not having health insurance is the greater of 2.5 percent of your income or $695. There is currently no means to criminally prosecute those who do not have health insurance and also refuse to pay the shared responsibility payment.
What’s that part about the Medicaid expansion?
The health-care law also expanded Medicaid to cover all nonelderly people with an income below 133 percent of the poverty line, and gave the government the authority to penalize states that choose not to participate in this expansion by taking away their existing Medicaid funding.
The court called this “economic dragooning” that leaves states with no option but to accept the expansion, and found that it violated the Constitution because states could not have anticipated such a dramatic restructuring of Medicaid.
However, the court found that the Medicaid expansion could be saved by removing the government’s authority to remove all of a state’s Medicaid funds if it chooses not to accept the expansion.
What will happen next?
Politicians have been falling over each other to respond to the ruling.
House Majority Leader Eric Cantor immediately called for a vote to repeal the law. The vote is scheduled for July 11.
“The Supreme Court’s decision to uphold Obamacare is a crushing blow to patients throughout the country,” Cantor said. “Obamacare has failed to keep the president’s basic promise of allowing those who like their health care to keep it, while increasing costs and reducing access to quality care for patients.”In remarks Thursday morning, Mitt Romney told reporters, “What the court did not do on its last day in session, I will do on my first day if elected president of the United States. And that is I will act to repeal Obamacare.
“Our mission is clear,” Romney said. “If we want to get rid of Obamacare, we’re going to have to replace President Obama. My mission is to make sure we do exactly that.”
Ahead of a closed-door meeting of Republicans, House Speaker John Boehner issued a statement: “Today’s ruling underscores the urgency of repealing this harmful law in its entirety.
“What Americans want is a common-sense, step-by-step approach to health-care reform that will protect Americans’ access to the care they need, from the doctor they choose, at a lower cost. Republicans stand ready to work with a president who will listen to the people and will not repeat the mistakes that gave our country Obamacare.”
8 Facts About the GOP Tax Cuts That Dems Don’t Want to Talk About
Posted by Alex Hendrie on Tuesday, April 17th, 2018, 3:34 PM PERMALINK
1. Thanks to Tax Reform, 90 Percent of Wage Earners Are Seeing Increased Take-home Pay:
•A family of four with annual income of $73,000 (median family income) will see a tax cut of more than $2,058, a 58 percent reduction in federal taxes.
•A single parent with one child with annual income of $41,000 will see a tax cut of $1,304, a 73 percent reduction in federal taxes.
•Married small business owners with annual income of $100,000 will see a tax cut of $2,603, a 24 percent reduction in federal taxes.
2. Americans at Every Income Level Are Seeing Significant Tax Reduction Because of the Tax Cuts and Jobs Act:
•90 percent of taxpayers with annual income of between $40,000 and $64,000 will see an average federal tax cut of $810 in 2018.
•91 percent of taxpayers with annual income between $64,000 and $108,000 will see an average federal tax cut of $1,400 in 2018.
•87 percent of taxpayers with annual income between $108,000 and $232,000 will see an average federal tax cut of $2,710 in 2018.
3. Thanks to Tax Reform, Families and Individuals Across the Country Will See A Fairer, Simpler Tax Code Starting 2018:
•The Tax Cuts and Jobs Act doubled the standard deduction for an individual from $6,000 to $12,000 and for a family from $12,000 to $24,000. 105,055,150 families and individuals took the standard deduction in 2015. ◦Because of tax reform, 93 percent of filers will now take the standard deduction, resulting in significant simplification of the tax code.
•The Tax Cuts and Jobs Act raised the threshold of the Alternative Minimum Tax so fewer taxpayers are forced to comply with the provision. 4,464,430 families and individuals paid the Alternative Minimum Tax in 2015.
•The Tax Cuts and Jobs Act doubled the child tax credit from $1,000 to $2,000 per child. 22,324,780 families took the Child Tax Credit in 2015.
4. Thanks to Tax Reform, American Families Will See Relief from the Obamacare Individual Mandate Tax Penalty.
•Obamacare imposed a tax penalty of $695 for an individual and $2,085 for a family of four for failing to buy “qualifying” health insurance as defined by the federal government. The Tax Cuts and Jobs Act repeals this unfair tax.
•The Obamacare individual mandate tax penalty is one of the most regressive taxes in the code as it disproportionately impacts low and middle-income families: ◦6,665,480 individuals and families paid a total of $3,079,255,000 in individual mandate tax penalties in 2015.
◦37.35 percent of taxpayers (2,489,490 households) that paid the individual mandate made less than $25,000 in annual income.
◦78.98 percent of taxpayers (5,264,380 households) that paid the individual mandate made less than $50,000 in annual income.
5. Business Confidence Is at an All-Time High Following Tax Reform:
•Small business optimism has been at an all-time high since early 2017: ◦According to a survey by the National Federation for Independent Businesses, small business owners are seeing historically high business conditions and expected sales. Hiring and spending on new capital are also extremely high levels.
•Optimism amongst manufacturers is at an all-time high because of tax reform: ◦According to a survey by the National Association of Manufacturers, 93.5 percent of manufacturers registered a positive outlook in the first quarter of 2018, following 94.6 percent positive outlook in December 2017.
◦Small manufacturers recorded a 94.5 percent positive outlook in Q1 of 2018.
•Optimism amongst middle market businesses is at an all-time high: ◦73 percent of middle market executives expect a stronger economy, according to the RSM US Middle Market Business Index.
◦58 percent of middle market companies plan to hire more workers and 63 percent plan to increase wages in the Q2 or Q3 of 2018.
◦45 percent have already increased hiring and almost 50 percent have increased wages in Q1 of 2018.
6. Businesses Large and Small Have Responded to Tax Reform by Announcing Pay Raises, Bonuses, 401(k) Match Increases, Increased Charitable Contributions and Workforce Development Programs. For Example:
•Anfinson Farm Store – a family owned business in Cushing, Iowa (population 223) – has given its employees a $1,000 tax reform bonus and raised wages by 5 percent.
•AT&T has provided 200,000 U.S. employees with a $1,000 tax reform bonus.
•Kentucky-based Turning Point Brands, Inc. will give 107 employees a $1,000 tax reform bonus.
•Wichita Railway Services is giving its five employees tax reform bonuses of between $3,000 and $6,000.
•Boeing announced $300 million to be spent on charitable donations, workforce development and infrastructure improvement because of tax reform.
•Five Senses Spa, Salon and Barbershop based in Peoria, Illinois gave $500 tax reform bonuses to its 20 employees.
•Walmart is increasing its base employee wage to $11 per hour, is giving tax reform bonuses of up to $1,000, is expanding maternity and parental leave and giving a $5,000 allowance for adoption expenses.
•Heating and cooling company AAON — with facilities in Tulsa, Oklahoma and Longview, Texas — gave its 2,000 employees a $1,000 tax reform bonus.
•Tampa-based Spellex Corporation gave its 26 employees $1,000 tax reform bonuses.
•Comcast is giving $1,000 tax reform bonuses to 100,000 employees.
•Visa is doubling its 401(k) employee contribution match to a maximum of 10 percent of employee pay because of tax reform.
7. Utility Companies are Responding to Tax Reform by Lowering Rates by $4.5 billion for 92 million customers. For example:
•Illinois-based ComEd is passing $200 million worth of savings to consumers due to tax reform.
•Baltimore Gas & Electric is passing $82 million in annual savings to customers due to tax reform.
•Arizona Public Service has requested a $119 million bill reduction for customers due to tax reform.
•Consumers Energy based in Jackson, Michigan will lower customer bills by approximately $200 million because of tax reform.
•Georgia Power will provide $1.2 billion in benefits because of tax reform.
8. Democrats Have Proposed At Least One Trillion Dollars in Higher Taxes Including:
•A $139 billion income tax increase on individuals.
•An increase in the Alternative Minimum Tax, a tax hike of $429 billion.
•An increase in the Death Tax totaling $83 billion.
•A $359 billion tax increase on businesses.
ATR Releases List of 2018 Pennsylvania State Pledge Signers
In a letter to Treasury Secretary Steven Mnuchin, ATR urged the department to broaden the high-tax exception that exists under Section 951A Global Intangible Low-Tax Income (GILTI) in order to prevent an unintended consequence to the tax law that may harm American competitiveness and increase taxes on businesses.
The Tax Cuts and Jobs Act passed last year dramatically overhauled the U.S. international tax system. The law added the new GILTI provision, which was designed to counteract base erosion from moving to a territorial system. At the same time, TCJA left the existing subpart F base erosion rules untouched.
These changes have resulted in some unintended consequences. For instance, the law could be currently interpreted as including high-tax, foreign source income in the new GILTI regime. This income would otherwise be subpart F income but for an exception to Subpart F such as the active finance exception or active insurance exception.
This is poor policy that is not required by the statute and should be fixed – high-tax foreign income has historically been exempted from U.S. taxation under the Subpart F rules because it was already taxed in the country of origin.
In effect, this creates a situation where high-tax active CFC income from foreign jurisdictions is now being treated worse than easily-shifted passive CFC income.
This is problematic as the rationale for base erosion provisions is to counteract the possible shifting of intangible income to low tax jurisdictions. As the letter notes, this will create perverse incentives for businesses to restructure and will harm American competitiveness:
This discrepancy could create significant adverse consequences for businesses and result in a net tax increase relative to pre-TCJA law. Businesses will now have perverse incentives to restructure business operations in a way that is costly, that creates future complexity, or that may not be practical in foreign jurisdictions.
This absence of a broadened exception will also harm American competitiveness given U.S. businesses face additional tax on high-tax CFC income, while foreign competitors face no additional tax on their high-tax income.
Treasury should address this issue by interpreting the current high-tax exception in GILTI so that it applies not only to passive Subpart F income, but also to active high-tax non-Subpart F income.
As the letter states, Congress intended for high-tax foreign income to be exempt from GILTI because this type of income is already exempted from U.S. tax based on the conference report to TCJA released by the Senate Finance Committee:
“The Committee believes that certain items of income earned by CFCs should be excluded from the GILTI, either because they should be exempt from U.S. tax – as they are generally not the type of income that is the source of base erosion concerns – or are already taxed currently by the United States. Items of income excluded from GILTI because they are exempt from U.S. tax under the bill include foreign oil and gas extraction income (which is generally immobile) and income subject to high levels of foreign tax.”
Congress Should Use the Lame Duck Session to Repeal the Obamacare Health Insurance Tax, Medical Device Tax, and Expand HSAs.
In the past two years, Republicans have made significant progress towards reforming the health care system. Most notably, Republicans repealed the individual mandate tax that was crushing middle and lower-class families that couldn’t afford health care. Obamacare’s most famous tax was a blatant war on the middle class, with 79% of individuals affected by the tax making $50,000 or less, and 37% of people affected by the tax making $25,000 or less.
The Trump Administration also recently issued a slew of new rules through the Department of Labor and the Department of Health and Human Services that strengthened health care choice and access to care for employees and employers. The new rules expanded health reimbursement accounts so that small- and medium-sized employers can easily offer their workers an HRA to pay $1,800 of medical expenses per year. The new rules also allowed small businesses to band together and form association health plans.
Again, while these are significant wins, the GOP should not let the lame duck session pass without building on their success.
The Health insurance tax should be delayed or repealed outright, HSAs should be expanded, and the medical device tax should be rolled back.