Thursday, October 19, 2017



New Report: GOP Tax Reform Could Boost Household Income by $4,000

A study released Monday by the president’s Council of Economic Advisers found that congressional Republicans’ tax reform framework would produce thousands of dollars in income growth for American households. 

“Reducing the statutory federal corporate tax rate from 35 [percent] to 20 percent would … increase average household income in the United States by, very conservatively, $4,000 annually,” says the report from the advisory agency within the Executive Office of the President.

Income increases could reach as much as $9,000, according to the report. 

Using 2016 household income as the baseline, these effects translate into an increase in average household income from $83,143 in 2016 to between $87,520 and $92,222, an increase of $4,000 to $9,000 in wage and salary income alone.

According to the nonprofit Tax Foundation, the U.S. “has the fourth-highest statutory corporate income tax rate in the world.” The foundation’s September report continues:

“The U.S. rate of 38.91 percent (comprised of the federal statutory rate of 35 percent plus an average of the corporate income taxes levied by individual states) ranks only behind the United Arab Emirates (55 percent), Comoros (50 percent), and Puerto Rico (39 percent).”

“The main reason that wages increase is that the lower tax rate reduces the total cost of a firm that’s investing in a capital asset, like a machine, here in the U.S., and more assets like machines let workers produce more,” Kevin Hassett, chairman of the Council of Economic Advisers, said in comments released Monday. “And when workers can produce more, businesses can afford to pay their workers more.”

The GOP tax framework presented Sept. 27 by House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, and other GOP leaders seeks to significantly simplify the tax code.

It calls for roughly doubling taxpayers’ standard deduction (an individual’s first $12,000 of income would become tax-free, as would the first $24,000 for married couples) and for condensing the current seven tax brackets to three.

Depending on their income, individual taxpayers currently are taxed at one of these percentages: 10, 15, 25, 28, 33, 35, or 39.6 percent. The three brackets in the Republicans’ proposed framework are 12 percent, 25 percent, and 35 percent.

The GOP tax reform framework slashes the current corporate tax rate from 35 percent to 20 percent.

“The  increases recur each year, and the estimated total value of corporate tax reform for the average U.S. household is therefore substantially higher than $4,000,” the report says. “Moreover, the broad range of results in the literature suggest that over a decade, this effect could be much larger.” 

Researchers at Boston University found the tax reform framework increases the gross domestic product.

In a report Monday from Boston University scholars Seth G. Benzell, Laurence J. Kotlikoff, and Guillermo Lagarda, “Simulating The Republican ‘Unified Framework’ Tax Plan,” the scholars found the GOP plan would raise the gross domestic product by between 3 percent and 5 percent.

The researchers also found that real wages, the value of wages adjusted for inflation, are expected to rise by between 4 percent and 7 percent. “The Boston University analysis shows that the GOP’s Unified Framework will raise wages by [4 percent to 7 percent], translating into a $3,500 wage increase for an average American household,” says Adam Michel, a tax-policy analyst at The Heritage Foundation.

SOURCE

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DeSantis: Trump Tax Plan Provides 'Immediate Relief' for Families

The rate reductions that are part of President Donald Trump's tax code plan, combined with the call to simplify the tax process, will provide "immediate relief" for American families, Rep. Ron DeSantis said Wednesday.

"The simplicity of the tax code going from 75,000 pages down to a simple system will also give families more time and resources to spend on other things other than tax prep," the Florida Republican told Fox News' "America's Newsroom" program. "By incentivizing companies to locate and stay here, bring profits from overseas back here, I think there will be more employment opportunities for the American people."

DeSantis said he thinks that some of the senators who caused problems with healthcare will also have their own views on tax reform.

"Some of them have opposed tax relief in the past and just really aren't engaged in wanting to cut taxes," DeSantis said. "I think the case needs to be made to them that we're really laying a foundation for sustained growth far into the future. It will have immediate benefits for families."

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ObamaCare Is Still Obama's

While Trump made some welcome changes to the law, its failure still belongs with one party: Democrats.

It’s been said that since ObamaCare became law, the U.S. government is now a health insurance company that fields a military. Sadly, that’s not far off the mark and is an affront to those who understand the Constitution and personal liberty.

Pitifully, a growing population turns first to the government to solve their problems, such as health insurance coverage, despite the enumerated powers laid out by the Law of the Land. Now we have a very large sector of America’s economy that is manipulated by government rules, regulation and control that standardizes inefficiencies and ineffectiveness, not to mention inflates costs.

The good news is President Donald Trump acted last week to halt illegal subsidies paid from the U.S. Treasury to insurance companies to cover their losses and, ostensibly, to keep premiums lower. Naturally, the #VeryFakeNews media has been in hyper drive to frame the narrative of the Hateful Republican President who is killing people by taking away their health care through the wrongful use of an executive order.

Let’s apply the truth to the hyperventilating Left and the insurance companies who spent hundreds of millions of dollars lobbying for this failed policy, and who are now trying to cover up the need for billions in taxpayer bailouts — a.k.a. in bureaucratic-ese, cost-sharing reduction payments.

Fact: In the original “Affordable” Care Act, a risk pool of funding was created to pay insurance companies for potential losses and subsidize low-income patients. But, when the losses were totaling hundreds of millions of dollars because young, healthy individuals didn’t take the carrot/stick to pay high premiums for insurance with an enormous out-of-pocket deductible to finance the expansion of Medicaid and artificially lower premium costs for the sick, that risk pool ran dry. This explains the sky-high annual premium increases since ObamaCare took effect.

Fact: Since the risk pool was woefully inadequate to cover losses and to reimburse commercial insurance companies for the mandated low-cost premiums for some, Barack Obama made an appropriation request of the Congress that was not approved. In response, he used his pen to do it anyway — an action deemed illegal by DC district court in 2016. The ruling came after a 2014 lawsuit filed by the House challenging the cost-sharing reduction (CSR) payments as lacking a specific, legal appropriation.

With his phone and his pen, Obama, the once-constitutional lecturer, overstepped the Constitution’s declaration that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law…” The Appropriations Clause, as he should know, enumerates the power of the purse to lie in Congress, not by an imperial attempting to salvage his signature legislation.

Fact: These cost-sharing reduction payments, being illegal, were rightfully halted by President Trump with the issue returned to Congress to address. So, despite the dripping hatred from leftists who cannot get over the loss of their coroneted queen, Trump acted in a constitutional manner to correct a wrong.

Relentless in their aim, the Left parrots false statements to grip the GOP with fear. That includes the usual Democrat/media claims that Republicans hate poor people and are trying to kill them just as the November 1st sign-ups begin for ObamaCare coverage in 2018.

Again, the antidote to a plague of lies is a big dose of truth with the disinfectant of sunshine.

In news accounts that began seeping into the public back in the summer as insurance companies were making premium cost projections, the “uncertainty” of the cost-sharing reduction (CSR) payments pushed some state insurance regulators to have commercial insurers include in their projected premium cost increases the absence of these subsidies or at least submit two projections — one with the CSR one without.

So, another fact: According to the American Academy of Actuaries July publication, these adjusted projections to address this uncertainty attributed to much of the requested increases already made this year for next year’s premium costs. Get that? States like Tennessee approved premium increases this summer to account for the elimination of the CSR payments.

But here’s the part that really disrupts the narrative of folks like those who penned the Oct. 12 Bloomberg editorial, “Trump’s Healthcare Wrecking Ball.” The hypoxic-inducing tantrums that Trump’s move will hurt the poor by shifting costs to the sickest patients, while schizophrenically declaring in the same article that the healthy subsidize the sick, are simply false.

Back to the July American Academy of Actuaries, which notes, “Although those who receive premium subsidies would be insulated from the full increase in premiums, nonsubsidized enrollees would face the full increase, potentially affecting their enrollment behavior and therefore the morbidity of the risk pool” if the CSR payments were to be eliminated.

While President Trump eliminated the illegal payments from the U.S. Treasury to insurance companies, the law still demands that insurance companies offer lower premiums based on income. So, by law, insurance companies must keep prices artificially low for some with the nonsubsidized enrollees paying full price. Again, according to the Actuaries, those forced into buying government-sanctioned insurance with no subsidies “would face the full increase.”

Let’s sum this up. A law empowering government to control health insurance is failed policy and law. Using taxpayer money to make illegal payments to private insurance companies to correct flaws in the law and has rightfully been halted with the issue returned to Congress for action. Failing ObamaCare is still in place despite more than seven years of GOP promises to repeal and replace the law, and despite the president’s smart moves to inject free-market, consumer-driven controls into the health insurance market.

ObamaCare should now be called ObamaScare considering the frightful tactics of the Left to attempt to affix wrongful blame. But notwithstanding attempts to hang it around Republican necks, this law will forever be the dud prize of Obama and Democrats. It’s now up to Republicans to restore the order of a constitutional government and work with a president whose agenda is overwhelmingly supported by Americans to replace a failed law with effective policy.

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