This Is How Much Average Americans Will Pay for Trump’s Tax Cuts for the 1 Percent

The following article by Rachel West, Katherine Gallagher Robbins and Melissa Boteach was posted on the Center for American Progress website October 16, 2017:

CREDIT: AP Photo/Susan Walsh

On the heels of their humiliating health care debacle, President Donald Trump and congressional Republicans are stepping up efforts to push a tax plan designed to benefit the wealthy. The plan makes vague and unspecific overtures when it comes to provisions that could benefit working- and middle-class taxpayers, but it is crystal clear about the benefits it would bestow on rich individuals and wealthy corporations.

For example, the plan removes taxes on extremely wealthy estates, slashes the top income tax rate from 39.6 percent to 35 percent, and abolishes the alternative minimum tax, which ensures that higher-income households—which are often able to take advantage of lucrative deductions and credits—contribute at least some modicum of taxes. It also gives a special low tax rate to owners of pass-through businesses, who are already able to avoid corporate taxes by instead paying personal tax rates on their portion of the businesses’ profits, allowing them a lower effective tax rate. All of these provisions would benefit the wealthiest Americans, including Trump himself.

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Almost half of Republicans want war with North Korea, a new poll says. Is it the Trump Effect?

The following article by Aaron Blake was posted on the Washington Post website October 15, 2017:

South Koreans watch TV news in Seoul in August, on the day North Korea launched three ballistic missiles over the Sea of Japan. (Jeon Heon-Kyun/European Pressphoto Agency)

There was a pretty striking finding in Thursday’s Quinnipiac University poll: Fully 46 percent of Republicans — a plurality — said they would support a preemptive strike against North Korea.

That’s nearly half of President Trump’s party that is ready for war — today — with Kim Jong Un, his nuclear weapons and all. (Forty-one percent said they opposed a preemptive strike.)

It’s no surprise that Republicans are more hawkish on this than Democrats are; that’s generally the case on foreign policy. But basically nobody is talking about the prospect of a strike right now. Even when Trump talks about it, he’s responding to North Korea threatening the United States or its allies. Read More

Why Trump’s executive order may compound the health insurance industry’s problems

The following article by Profession J.B. Silvers was posted on the Conversation website October 13, 2017:

Credit: REUTERS/Kevin Lamarque

President Donald Trump has issued the first of what promises to be a series of health insurance executive orders aimed at dismantling the Affordable Care Act.

It instructs the government to essentially exempt small businesses and potentially individuals from some of the rules underpinning the landmark legislation known as “Obamacare,” following the GOP’s failureto get Congress to approve a plan to repeal and replace it.

These steps would free more employers to access bare-bones and short-term health insurance coverage and join together to bargain with insurers. It’s not clear how this order will change the U.S. health insurance market. But as a health finance professor and the former CEO of an insurance company, I’m confident it is more likely to compound many of Obamacare’s problems than to fix them.

Designed this way

To be sure, the Affordable Care Act has problems. For example, premiums have continued to rise since the Affordable Care Act’s enactment – albeit at a moderate pace for insurance obtained through employment.

In particular, many smaller employers have seen their costs rise dramatically since insurers were forced to price their plans based on the average of all claims in the small group market rather than the experience of each firm.

But there is a reason why Obamacare was designed this way. Employers with older and less healthy workers were almost shut out of the insurance market because insurers deemed them so costly to cover and wanted to avoid the risk. Companies with younger and healthier workers had a good deal previously, but many other employers did not.

The Affordable Care Act was supposed to solve this problem by lumping everyone together to even out rates. Making rates more reasonable for many Americans meant requiring some of us to pay more.

Market dynamics

The government’s attempt to keep President Barack Obama’s oft-repeated promise that “if you like your current plan, you can keep it” didn’t help. Employers with low-cost plans and healthier workforces chose to be grandfathered out of many new requirements, leaving a much less healthy – and more expensive to cover – pool for pricing everyone else’s insurance.

Nevertheless, the share of adults without health insurance fell to a record low of 10.9 percent in late 2016, from 18 percent before the health insurance exchanges opened in October 2013, as measured by polling by Gallup and Sharecare. (The uninsurance rate has ticked up to 11.7 percent since Trump took office.)

What would be a good way to get the remaining 28 million Americansinsured at a reasonable cost? It may seem obvious that letting small businesses without much purchasing power in the health insurance market band together will enable them to get the same deals as large self-insured companies – which get to choose among a variety of options.

In most markets, this kind of diversity and choice fosters the robust competition Trump says he wants to see. But in health insurance, this may lead to fragmentation and market failure.

That’s because as insurers scramble for ideal customers – those least likely to get sick – they drive higher-risk people away by charging them higher premiums and making them foot a bigger share of their medical bills. Unfortunately, the latter (people often with preexisting conditions and requiring long-term treatment) really need medical care and the insurance coverage required to get it.

Because of this, all but the largest of the association health plans that the executive order is supposed to encourage still will most likely exclude high-risk individuals and employers, just as they have in the past, as health law expert Tim Jost predicts.

How will the vulnerable get health care?

Trump said that his executive order will help “millions and millions of people.” But I believe it is more likely to drive coverage for many out of reach while benefiting the Americans whose insurance needs are relatively minimal.

One could argue that the government should never have tried to force healthier people to pay so much more for coverage to make it affordable for everyone else. Yet the nation needs a mechanism to help Americans with chronic and preexisting conditions pay for the medical care they need.

Pres. Trump says he’s signing executive order to provide millions of Americans with Obamacare relief; will cost gov’t “virtually nothing.”

Establishing high-risk pools is one way to make this work, and they definitely can help as long as there is funding available. Unfortunately, most attempts to handle high-risk individuals this way have run out of money and left vulnerable patients high and dry. Trump’s approach does nothing to deal with this.

Any solution that makes health insurance more affordable across the board will need to be comprehensive. I believe Trump is instead embarking on a process that is both naïve and piecemeal based on wishful thinking regarding the power of markets to resolve all the problems with this difficult sector.

During his signing ceremony, he promised that the policies established by the order would “cost the government virtually nothing.” If that proves true, it is likely that we will receive exactly what we pay for.

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Doubtful Science Behind Arguments to Restrict Birth Control Access

The following article by Aaron E. Carroll was posted on the New York Times website October 10, 2017:

In a new rule about coverage of contraception, the Trump administration argues against the positives of birth control and highlights potential harms. But those claims don’t stand up to scrutiny.

The new rule weakens the mandate for health coverage of contraception under the Affordable Care Act, giving more leeway to employers with religious or moral objections. It’s a move with many legal and economic implications, but my interest here is with the science — specifically with the assertions made by the Department of Health and Human Services about the benefits and harms from contraception. Read More

Republican Tax Plan is a Bad Deal for Working Families

The following column was written by State DFL Chair Ken Martin:

As Congress turns to tax reform, details surrounding the Republican tax plan remain blurry. But we know one thing for sure: The plan balances massive handouts for the wealthy on the backs of working Americans.

The Republican tax proposal is written by Wall Street, for Wall Street. Literally. President Donald Trump tapped two former Wall Street executives—Steven Mnuchin and Gary Cohn—to secretly craft a tax plan and force a partisan vote without the American people knowing how much they’ll be harmed. Read More

Kansas Tried a Tax Plan Similar to Trump’s. It Failed.

The following article by Jim Tankersley was posted on the New York Times website October 10, 2017:

Gov. Sam Brownback, center, signed the tax bill into law in May 2012. The law cut individual income taxes and eliminated state income taxes entirely for pass-through entities in an attempt to attract investment and create jobs. Credit Thad Allton/Topeka Capital-Journal, via Associated Press

WICHITA, Kan. — In December 2014, the University of Kansas agreed to pay David Beaty $800,000 a year, plus incentives, to be the football program’s head coach, but with an interesting structure: More than two-thirds of that pay would be channeled to an organization called DB Sports L.L.C.

DB Sports is what accountants call a pass-through entity, and it pays all of its profits directly to Mr. Beaty. As a result of a tax law that Kansas lawmakers passed in 2012, ostensibly to benefit beleaguered small businesses in the state, that contract structure allowed Mr. Beaty to avoid paying about $37,000 a year in state income taxes, nearly enough to fund a first-year teacher’s salary in the Wichita school district. Read More

GOP-Trump Tax Framework Would Provide Richest One Percent in Minnesota with 62.2 Percent of the State’s Tax Cuts

The following article was posted on the Institute on Taxation and Economic Policy website October 4, 2017:

The “tax reform framework” released by the Trump administration and congressional Republican leaders on September 27 would not benefit everyone in Minnesota equally. The richest one percent of Minnesota residents would receive 62.2 percent of the tax cuts within the state under the framework in 2018. These households are projected to have an income of at least $632,000 next year. The framework would provide them an average tax cut of $65,780 in 2018, which would increase their income by an average of 2.5 percent.

The framework would particularly benefit those with incomes greater than $1 million. These households will make up just 0.7 percent of Minnesota’s population but would receive 55.2 percent of the tax cuts if the plan was in effect next year. This group would receive an average tax cut of $78,600 in 2018 alone, which would increase their income by an average of 2.8 percent. Read More

DFL Chair Martin Calls on Republicans to Restore CHIP Funding

Minnesota Democratic-Farmer-Labor (DFL) Chairman Ken Martin wrote the following column in the St. Cloud Times calling on Republicans to restore funding for the Children’s Health Insurance Program (CHIP). Amid frantic efforts to repeal the Affordable Care Act, the Republican-controlled U.S. Congress missed the deadline to renew funding for this critical program, which provides health coverage to 125,000 children in Minnesota.

Republicans must restore CHIP funds

While Republicans temporarily called off efforts to repeal the Affordable Care Act, they unfortunately still managed to jeopardize the health care of millions of Americans.

They were so busy trying to ram through a repeal bill that they dropped the ball on providing health coverage for nearly 9 million kids. The Republican-controlled Congress failed to renew funding for the Children’s Health Insurance Program by its Sept. 30 deadline.

This program provides comprehensive, affordable health insurance for low-income children not covered by Medicaid. CHIP is one of the few federal programs that has enjoyed strong bipartisan support since its creation in 1997.

Minnesotan families count on CHIP. The program helps pay for doctor’s visits, immunizations and dental care for more than 125,000 children in Minnesota. It provides parents with the relief that comes from knowing their child can see a doctor and lead a healthy life. The program’s funding also pays for care for roughly 1,700 low-income pregnant women in our state.

Congress was closing in on a deal to extend CHIP funding last month. But all that work came grinding to a halt as Republicans fixated on ramming through a health care repeal bill before Sept. 30. The health of millions of children fell to the wayside.

If funding isn’t restored soon, doctors will have to start turning young patients away. The situation is particularly dire here in Minnesota. Our state’s program is already running dry. Minnesota’s Department of Health Services reports it will have to take “extraordinary measures” to continue providing children coverage through October.

The health of thousands of Minnesota kids hangs in the balance. Democrats stand ready to work with the Republican majority to fund this critical program. Republicans must make up for the time they wasted, do the right thing, and take immediate action to protect Minnesota kids.

Republicans Once Railed Against Deficits. Now President Trump’s Tax Plan Piles On More Than $2 Trillion In Red Ink

The following article by Lisa Mascaro with the Tribune Content Agency’s Washington Bureau was posted on the National Memo website October 6, 2017:

President Trump spoke about his administration’s tax reform plan in Indianapolis on Wednesday. Credit Tom Brenner/The New York Times

WASHINGTON — Not long ago, Paul D. Ryan stood before charts and graphs as the House Budget Committee chairman like a new Ross Perot, promoting an austerity plan that slashed taxes and spending, and warning of the dangers of deficits.

“The facts are very, very clear: The United States is heading toward a debt crisis,” he said then. “We face a crushing burden of debt which will take down our economy, which will lower our living standards.” Read More

Inspector General Debunks (Again) The IRS ‘Scandal’ That Never Was

The following article by Matt Gertz was posted on the MediaMatters website October 5, 2017:

Sarah Wasko / Media Matters

A new report should end the conservative fixation on the “IRS scandal.” It probably won’t.

The “IRS scandal” — the right-wing delusion that the Internal Revenue Service was disproportionately targeting conservative groups seeking tax-exempt status and slow-walking their approvals — began as a political hit job by a partisan Republican congressman. It matured into a full-fledged scandal, with President Barack Obama apologizing and the IRS commissioner resigning in disgrace. And it should die after last night, when reports circulated that a federal watchdog had found that progressives groups had also been targeted for scrutiny in the same way over the same period. Read More