Pennsylvania families could get notified in a few weeks that their children will lose their health insurance by the end of January.
Reported by philly.com 14 hours ago.
When will Pa., N.J. run out of funds for popular children's health program?
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Oregon AG joins suit opposing Trump's contraception rollback
Attorney General Ellen Rosenblum joined 19 other attorneys general in opposing the Trump administration’s decision to roll back the Affordable Care Act’s mandate for employers to cover birth control in their health insurance plans. Rosenblum filed a friend-of-the-court brief arguing the new rule discriminates against women and denies equal protection under the law. It allows employers to justify denying critical benefits for women on religious grounds while leaving men’s coverage unchanged,…
Reported by bizjournals 13 hours ago.
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As Congress looks to eliminate a major provision of Obamacare, Coloradans are flocking to sign up for health insurance
Even as Congress debates tax bills that could weaken a key pillar of the Affordable Care Act, Coloradans are signing up for health insurance on the state's exchange at a faster rate than last year.
Reported by Denver Post 11 hours ago.
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Robert Reich: The True Path To Prosperity – OpEd
It’s often thought that Democrats care about fairness and not economic growth, while Republicans care about growth even at the cost of some fairness.
Rubbish. Growth and fairness aren’t opposites. In reality, Democrats are the party of economic growth and fairness. Republicans are the party of neither.
The only way to grow the economy is by investing in the education, healthcare, and infrastructure that average Americans need in order to be more productive. Growth doesn’t “trickle down.” It rises up.
Consider the two biggest legislative initiatives over past decade – the Affordable Care Act, achieved without a single Republican vote, and the current Trump-Republican tax overhaul, speeding ahead without a single Democrat.
The ACA extends coverage to 21 million mostly lower-income Americans, including millions of children.
It’s largely paid for by two tax increases on the rich – a 3.8 percent increase on their capital gains taxes and other investment-related income, and a 0.9 percent surcharge on their Medicare taxes. Those tax increases are a major reason why Republicans have wanted to repeal it.
But the ACA isn’t just about fairness. Healthier Americans are also more productive workers. Children who receive health care are better learners. The Act thereby fuels economic growth and widens prosperity.
Republicans say their tax overhaul will promote growth by increasing the profits of American corporations and investors. This is trickle-down nonsense.
Every major study (including Congress’s own Congressional Budget Office and Joint Committee on Taxation) finds that its benefits would go mainly to big corporations and the wealthy.
Share prices may rise for a time. They’re already at record highs in anticipation of the tax cut. But higher share prices don’t trickle down, either. The richest 1 percent owns almost 38 percent of the stock market. Eighty percent of Americans together own just 8 percent of all shares of stock.
This won’t fuel growth. Corporations expand and invest only when customers are eager to buy what they produce. And most of these customers are middle-income and below, who spend just about all they earn. The rich spend only a small fraction.
Profits are now at record levels but corporations aren’t investing them. They’re using them instead to pump up share prices and executive pay.
After the Bush tax cuts of 2001 and 2003, economic growth stalled and then dissolved in recession. After the 2004 corporate tax holiday for bringing foreign profits home, corporations didn’t invest or expand. The Reagan tax cut of 1981 didn’t cause wages to rise; they flattened.
What’s the real formula for growth? Better access to education, healthcare, and transportation, all of which make workers more productive.
These more productive workers command higher wages. With higher wages, they purchase more goods and services. These purchases motivate companies to expand and invest, and create more and better jobs.
American experienced this virtuous cycle for thirty years after World War II. We invested unprecedented sums in education, healthcare, and infrastructure. We financed these investments through higher taxes on the rich and on big corporations.
The economy boomed and wages shot upward. The wages of the bottom fifth rose even faster than the wages of the top fifth. This unleashed consumer spending, which generated more growth.
The Clinton administration tried this formula on a much smaller scale in the 1990s, raising taxes on the top and investing in education and infrastructure. The economy boomed, 23 million new jobs were created, and for the first time since the late 1970s the typical American’s wage rose.
The Trump-Republican tax overhaul would take us in the opposite direction. It raises taxes on the middle class, which would reduce their purchasing power. The Senate version would cut the Affordable Care Act, causing millions to lose coverage.
It also explodes the federal debt, which will stymie growth. Debt service itself would likely require cuts in other programs such as Medicare, Medicaid, education, and transportation.
Senator Orrin Hatch warned last week that the Children’s Health Insurance Program may not be refunded “because we don’t have money anymore.”
The current tax proposal would also eliminate the state and local tax deduction, which would likely cause states to cut back spending, including education and infrastructure.
All of this would slow economic growth.
For years, Republicans have been selling tax cuts by lying that they spur growth, which trickles down to average Americans.
For just as long, Democrats have been selling fairness, but without explaining why a fairer economy is also more productive and prosperous.
It’s time for Democrats to make the case. It has the virtue of being true. Reported by Eurasia Review 6 hours ago.
Rubbish. Growth and fairness aren’t opposites. In reality, Democrats are the party of economic growth and fairness. Republicans are the party of neither.
The only way to grow the economy is by investing in the education, healthcare, and infrastructure that average Americans need in order to be more productive. Growth doesn’t “trickle down.” It rises up.
Consider the two biggest legislative initiatives over past decade – the Affordable Care Act, achieved without a single Republican vote, and the current Trump-Republican tax overhaul, speeding ahead without a single Democrat.
The ACA extends coverage to 21 million mostly lower-income Americans, including millions of children.
It’s largely paid for by two tax increases on the rich – a 3.8 percent increase on their capital gains taxes and other investment-related income, and a 0.9 percent surcharge on their Medicare taxes. Those tax increases are a major reason why Republicans have wanted to repeal it.
But the ACA isn’t just about fairness. Healthier Americans are also more productive workers. Children who receive health care are better learners. The Act thereby fuels economic growth and widens prosperity.
Republicans say their tax overhaul will promote growth by increasing the profits of American corporations and investors. This is trickle-down nonsense.
Every major study (including Congress’s own Congressional Budget Office and Joint Committee on Taxation) finds that its benefits would go mainly to big corporations and the wealthy.
Share prices may rise for a time. They’re already at record highs in anticipation of the tax cut. But higher share prices don’t trickle down, either. The richest 1 percent owns almost 38 percent of the stock market. Eighty percent of Americans together own just 8 percent of all shares of stock.
This won’t fuel growth. Corporations expand and invest only when customers are eager to buy what they produce. And most of these customers are middle-income and below, who spend just about all they earn. The rich spend only a small fraction.
Profits are now at record levels but corporations aren’t investing them. They’re using them instead to pump up share prices and executive pay.
After the Bush tax cuts of 2001 and 2003, economic growth stalled and then dissolved in recession. After the 2004 corporate tax holiday for bringing foreign profits home, corporations didn’t invest or expand. The Reagan tax cut of 1981 didn’t cause wages to rise; they flattened.
What’s the real formula for growth? Better access to education, healthcare, and transportation, all of which make workers more productive.
These more productive workers command higher wages. With higher wages, they purchase more goods and services. These purchases motivate companies to expand and invest, and create more and better jobs.
American experienced this virtuous cycle for thirty years after World War II. We invested unprecedented sums in education, healthcare, and infrastructure. We financed these investments through higher taxes on the rich and on big corporations.
The economy boomed and wages shot upward. The wages of the bottom fifth rose even faster than the wages of the top fifth. This unleashed consumer spending, which generated more growth.
The Clinton administration tried this formula on a much smaller scale in the 1990s, raising taxes on the top and investing in education and infrastructure. The economy boomed, 23 million new jobs were created, and for the first time since the late 1970s the typical American’s wage rose.
The Trump-Republican tax overhaul would take us in the opposite direction. It raises taxes on the middle class, which would reduce their purchasing power. The Senate version would cut the Affordable Care Act, causing millions to lose coverage.
It also explodes the federal debt, which will stymie growth. Debt service itself would likely require cuts in other programs such as Medicare, Medicaid, education, and transportation.
Senator Orrin Hatch warned last week that the Children’s Health Insurance Program may not be refunded “because we don’t have money anymore.”
The current tax proposal would also eliminate the state and local tax deduction, which would likely cause states to cut back spending, including education and infrastructure.
All of this would slow economic growth.
For years, Republicans have been selling tax cuts by lying that they spur growth, which trickles down to average Americans.
For just as long, Democrats have been selling fairness, but without explaining why a fairer economy is also more productive and prosperous.
It’s time for Democrats to make the case. It has the virtue of being true. Reported by Eurasia Review 6 hours ago.
↧
U.S. Senate tax bill accomplishes major Obamacare repeal goal
WASHINGTON (Reuters) - The sweeping tax overhaul that passed the U.S. Senate on Saturday contains the Republicans' biggest blow yet to former President Barack Obama's healthcare law, repealing the requirement that all Americans obtain health insurance.
Reported by Reuters India 3 hours ago.
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Senate tax bill accomplishes major Obamacare repeal goal
WASHINGTON (Reuters) - The sweeping tax overhaul that passed the U.S. Senate on Saturday contains the Republicans' biggest blow yet to former President Barack Obama's healthcare law, repealing the requirement that all Americans obtain health insurance.
Reported by Reuters 2 hours ago.
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New 2017 ez1095 ACA Software From Halfpricesoft.com Also Offers XML Validation For Efiling
ez1095 2017 ACA software also supports XML Validation to the IRS for business owner peace of mind. Test drive for up to 30 days with no obligation at http://www.halfpricesoft.com.
LOS ANGELES (PRWEB) December 02, 2017
The latest 2017 Ez1095 ACA software from Halfpricesoft.com offers a XML validation process which is essential to businesses. By using the validation process before sending forms to the IRS, this will eliminate forms being rejected, hence saving time and effort in the long run. The 1095C, 1094C, 1095B and 1094B forms for the upcoming tax season have been implemented and approved by the SSA to print on plain white paper.
ez1095 software offers customers a user-friendly graphic interface and Windows menus to make the software quick and easy to set up, use and understand. Priced from just $195 per installation, ez1095 can support multiple company accounts on the same machine with no extra charge.
“The new ez1095 2017 software for printing ACA forms is now offering XML validation process for peace of mind.” said Dr. Ge, the Founder of Halfpricesoft.com.
Customers that need to file Form 1095C, 1094C, 1095B and 1094B can download and try out this ACA software from halfpricsoft.com before purchasing with no obligation by visiting http://www.halfpricesoft.com/aca-1095/form-1095-software-free-download.asp
The main features include but are not limited to :· Print ACA Form 1095-C, 1094-C, 1095-B and 1094-B on white paper for recipients and IRS with inkjet or laser printer.
· PDF print 1095-C and 1095-B recipient copies
· Efile version available at additional cost.
· Support unlimited companies.
· Support unlimited number of recipients.
· Print unlimited number of 1095 and 1094 forms.
· Fast data import feature
· Print Form 1095 C: Employer-Provided Health Insurance Offer and Coverage Insurance
· Print Form 1094 C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
· Print Form 1095-B: Health Coverage
· Print Form 1094-B: Transmittal of Health Coverage Information Return
ez1095 software is compatible Windows 10, 8.1, 8, 7, Vista, XP and other Windows systems. Designed with simplicity in mind, ez1095 software is easy to use and flexible. ez1095 software’s graphical interface leads customers step-by-step through setting up company, adding employees, add forms and print forms. Customers can also click form level help links to get more details regarding the software.
To learn more about ez1095 ACA software, customers can visit http://www.halfpricesoft.com/aca-1095/aca-1095-software.asp
About halfpricesoft.com
Founded in 2003, Halfpricesoft.com has established itself as a leader in meeting the software needs of small businesses around the world with its payroll software, employee attendance tracking software, check printing software, W2 software, 1099 software and barcode generating software. It continues to grow with its philosophy that small business owners need affordable, user friendly, super simple, and totally risk-free software. Reported by PRWeb 2 hours ago.
LOS ANGELES (PRWEB) December 02, 2017
The latest 2017 Ez1095 ACA software from Halfpricesoft.com offers a XML validation process which is essential to businesses. By using the validation process before sending forms to the IRS, this will eliminate forms being rejected, hence saving time and effort in the long run. The 1095C, 1094C, 1095B and 1094B forms for the upcoming tax season have been implemented and approved by the SSA to print on plain white paper.
ez1095 software offers customers a user-friendly graphic interface and Windows menus to make the software quick and easy to set up, use and understand. Priced from just $195 per installation, ez1095 can support multiple company accounts on the same machine with no extra charge.
“The new ez1095 2017 software for printing ACA forms is now offering XML validation process for peace of mind.” said Dr. Ge, the Founder of Halfpricesoft.com.
Customers that need to file Form 1095C, 1094C, 1095B and 1094B can download and try out this ACA software from halfpricsoft.com before purchasing with no obligation by visiting http://www.halfpricesoft.com/aca-1095/form-1095-software-free-download.asp
The main features include but are not limited to :· Print ACA Form 1095-C, 1094-C, 1095-B and 1094-B on white paper for recipients and IRS with inkjet or laser printer.
· PDF print 1095-C and 1095-B recipient copies
· Efile version available at additional cost.
· Support unlimited companies.
· Support unlimited number of recipients.
· Print unlimited number of 1095 and 1094 forms.
· Fast data import feature
· Print Form 1095 C: Employer-Provided Health Insurance Offer and Coverage Insurance
· Print Form 1094 C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
· Print Form 1095-B: Health Coverage
· Print Form 1094-B: Transmittal of Health Coverage Information Return
ez1095 software is compatible Windows 10, 8.1, 8, 7, Vista, XP and other Windows systems. Designed with simplicity in mind, ez1095 software is easy to use and flexible. ez1095 software’s graphical interface leads customers step-by-step through setting up company, adding employees, add forms and print forms. Customers can also click form level help links to get more details regarding the software.
To learn more about ez1095 ACA software, customers can visit http://www.halfpricesoft.com/aca-1095/aca-1095-software.asp
About halfpricesoft.com
Founded in 2003, Halfpricesoft.com has established itself as a leader in meeting the software needs of small businesses around the world with its payroll software, employee attendance tracking software, check printing software, W2 software, 1099 software and barcode generating software. It continues to grow with its philosophy that small business owners need affordable, user friendly, super simple, and totally risk-free software. Reported by PRWeb 2 hours ago.
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Children's Health Insurance Program In Jeopardy In Colorado
Colorado contacted families who receive CHIP health care funding with a warning that support might end in January. NPR's Scott Simon talks with Gretchen Hammer, who runs the Colorado program.
Reported by NPR 23 hours ago.
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Access Health CT extends call center hours as deadline nears
HARTFORD, Conn. (AP) — Connecticut’s health insurance marketplace is extending call center operating hours to help people sign up for health insurance before the shortened open enrollment period ends. The call center will be open from 8 a.m. to 8 p.m., Monday through Friday, from Dec. 11 through Dec. 21. There will also be expanded […]
Reported by Seattle Times 21 hours ago.
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In Major Victory For Trump, Senate Passes Tax-Cut Bill Which Nobody Read: Here's What's In It
Shortly before 2am on Saturday, the Senate passed "*the most sweeping rewrite of the U.S. tax code in three decades*, slashing the corporate tax rate and providing temporary tax-rate cuts for most Americans" handing Republicans a badly needed legislative and political victory. *Senators voted across party lines in a 51-49 vote*, ending days of debate and "hand wringing" as leadership worked frantically behind the scenes to win over holdouts and get the proposal in line with the chamber’s rules.
Tennessee Senator Bob Corker, who had cited concerns over the bill’s effects on federal deficits, was the only Republican dissenter. Corker, who is retiring after 2018, said in a statement ahead of the vote that he "wanted to get to yes" on the tax plan. "But at the end of the day, I am not able to cast aside my fiscal concerns and vote for legislation that I believe, based on the information I currently have, could deepen the debt burden on future generations,” he said.
Corker's dissent however was not enough to halt passage, and shortly thereafter Vice President Mike Pence presided over the final passage vote. GOP senators, who stayed on the Senate floor until the vote closed after midnight, broke out into applause after Pence announced the bill had passed. * *
*"This is a great day for the country," *Majority Leader Mitch McConnell (R-Ky.) said during a 2 a.m. press conference after the vote. "We have an opportunity now to make America more competitive, to keep jobs from being shipped off shore and to provide substantial relief for the middle class."
The bill would lower tax rates for individuals through 2025 and permanently cut the corporate tax rate from 35% to 20% (more details below). The bill’s tax cuts for individuals are temporary in order to comply with budget rules that the measure can’t add to the deficit after 10 years. The bill would also repeal ObamaCare’s individual mandate, a priority for President Trump and many Republicans.
* * *
The vote brings the GOP close to delivering a much-needed policy win for their party and President Donald Trump. After the vote, Trump said on Twitter that he looks forward to signing a final bill before Christmas. The president expressed gratitude to McConnell and Finance Committee Chairman Orrin Hatch for steering the measure through the Senate. “We are one step closer to delivering MASSIVE tax cuts for working families across America,” Trump wrote on Twitter.
We are one step closer to delivering MASSIVE tax cuts for working families across America. Special thanks to @SenateMajLdr Mitch McConnell and Chairman @SenOrrinHatch for shepherding our bill through the Senate. Look forward to signing a final bill before Christmas! pic.twitter.com/gmWTny3SfS
— Donald J. Trump (@realDonaldTrump) December 2, 2017
On Saturday morning, Trump followed up his praise to the Senate GOP, tweeting the "Biggest Tax Bill and Tax Cuts in history just passed in the Senate. Now these great Republicans will be going for final passage. Thank you to House and Senate Republicans for your hard work and commitment!"
Biggest Tax Bill and Tax Cuts in history just passed in the Senate. Now these great Republicans will be going for final passage. Thank you to House and Senate Republicans for your hard work and commitment!
— Donald J. Trump (@realDonaldTrump) December 2, 2017
* * *
Amid the republican jubilation over the passage of a bill which is heavily weighted to benefit corporations and pass-throughs, and will encourage all self-employed businesses to become LLCs, there was juist one problem: *nobody actually read the 479-page bill*.
As Montana Senator Jon Tester wrote late on Friday:
I was just handed a 479-page tax bill a few hours before the vote. One page literally has hand scribbled policy changes on it that can’t be read. This is Washington, D.C. at its worst. Montanans deserve so much better. pic.twitter.com/q6lTpXoXS0
— Senator Jon Tester (@SenatorTester) December 2, 2017
NY Governor Andrew Cuomo showed what the "handwritten notes on the page" looked like:
Senate Republicans are so desperate for a win they are going to pass a tax increase on New York with handwritten changes to the bill. pic.twitter.com/pT2Xvubiy2
— Andrew Cuomo (@NYGovCuomo) December 2, 2017
Commenting on this, Senate Democrat Charles Schumer noted that a set of last-minute revisions to the bill changed it in ways that had yet to be analyzed by the Joint Committee on Taxation, Congress’s official scorekeeper for the effects of tax legislation. “*Is this really how Republicans are going to rewrite the tax code? Scrawled like something on the back of a napkin?”* However, McConnell said the bill, the first text of which was introduced on Nov. 20, went “through the regular order.” He dismissed complaints like Schumer’s. “You complain about process when you’re losing,” McConnell said.
Bottom line: the chaotic process was similar to how Obamacare was passed on Christmas Eve in 2009: in fact maybe a slight improvement: at least this time Congress didn't have to "pass the bill to find out what is in it." And it's not like anyone reads these bills anyway.
So what happens next?
Before it goes to Trump, lawmakers will have to reconcile differences between the Senate bill and one the House passed last month, a process that will begin Monday. Although both versions share common topline elements, negotiations on individual provisions inserted to win votes, particularly in the Senate, may be protracted and difficult. The final product will end up being a central issue in the 2018 elections that will determine control of Congress.
“We’re going to take this message to the American people a year from now,” Senate Majority Leader Mitch McConnell said after the vote.
* * *
Among the major overhauls, *both the House and Senate measures would cut the corporate tax rate to 20% from 35% - though the Senate version would set that lower rate in 2019, a year later than the House bill would. *Also, the Senate bill, unlike the House version, would provide only temporary tax relief to individuals, ending tax cuts for them in 2026. *Both bills are expected to add more than $1.4 trillion to the federal deficit over 10 years*, before accounting for any economic growth. Bloomberg reported that last minute revisions to help shore up GOP support added about $32.5bn to the measure’s 10-year cost, according to a one-page analysis from the Congressional Budget Office.
The House and Senate bills also align on the contentious issue of individual deductions for state and local taxes: They’d eliminate all but a deduction for property taxes, which would be capped at $10,000. They differ on the home mortgage-interest deduction; the House bill would restrict that break to loans of $500,000 or less with regard to new purchases of homes. The Senate legislation would leave the current $1 million cap in place.
According to Bloomberg, the bills also differ on the tax rates they’d apply to multinational companies’ accumulated offshore earnings. The House bill would tax those profits at 14 percent for earnings held as cash and 7 percent for less-liquid assets. The revised Senate bill contains a lengthy section that has no direct mention of the rates, but a person familiar with the Senate plan said they’d be 14.5 percent for cash and 7.5 percent for less-liquid assets.
*The Senate also approved a 23% tax deduction on business income earned from partnerships, limited liabilities and other so-called pass-through businesses. *The House version would create a 25% tax rate for such business income, with restrictions on which businesses could qualify. Small businesses would get extra relief under the House legislation as well.
The House bill would also eliminate the estate tax, while the Senate version would limit the tax to fewer multimillion-dollar estates, but leave it in place. And after 2025, the limits would lift. Under current law, the estate tax applies a 40% levy to estates worth more than $5.49 million for individuals and $10.98 million for married couples. The Senate bill would temporarily double the exemption thresholds. The House bill would double the exemption thresholds, and then repeal the tax entirely in 2025.
As discussed previously, *the House bill would consolidate the current seven individual tax brackets to four, leaving the top tax rate at 39.6%*. The Senate bill would have *seven brackets *- with lower rates, and a top rate of 38.5 percent. As Bloomberg notes, "*studies have shown that many of the tax bill’s benefits would go to the highest earners - and some middle-class taxpayers might actually pay more - a finding that could impact the House-Senate talks*."
Most importantly, perhaps, the Senate bill includes a repeal of Obamacare’s mandate that most Americans have health insurance or pay a penalty. The House bill does not.
While we have yet to get confirmation, below is a list of last minute changes and revisions that made it into the final bill per Reuters:
· *PASS-THROUGHS: *Senators Ron Johnson and Steve Daines announced their support for the tax bill after securing agreement on a bigger tax break for the owners of pass-through enterprises, including small businesses, S-corporations, partnerships and sole-proprietorships. An original 17.4 percent deduction would rise to 23 percent.
· *FULL EXPENSING: *Senator Jeff Flake, who was a holdout over deficit concerns, agreed to vote "yes" after Republican leaders agreed to change a provision allowing the full expensing of business capital investments to sunset after five years. Flake worried that Congress would be unable to eliminate the benefit cold turkey, allowing it to bleed red ink for years to come. But the Arizona Republican says the change would instead phase out full expensing over three years beginning in year six.
· *RETIREMENT SAVINGS: *Senator Susan Collins said she persuaded Republican leaders to retain catch-up contributions to retirement accounts for church, charity, school and public employees.
· *MEDICAL EXPENSES: *Collins also said she was able to include language to reduce the threshold for deducting unreimbursed medical expenses for two years to 7.5 percent of household income from 10 percent.
· *STATE AND LOCAL PROPERTY TAXES: *Collins has proposed an amendment that would retain a federal deduction for up to $10,000 in state and local property taxes.
· *INDIVIDUAL ALTERNATIVE MINIMUM TAX: *Rescinding a proposed repeal of the AMT and instead increase exemption levels and phase-out thresholds is also on the table.
· *CORPORATE ALTERNATIVE MINIMUM TAX: *So is rescinding a proposed repeal of the corporate AMT.
· *REPATRIATION: *Another change could be to increase tax rates on U.S. corporate profits held overseas to 14 percent for liquid assets and 7 percent for illiquid holdings, up from 10 percent and 5 percent, respectively
Attention now shifts to a House-Senate conference committee - a specially appointed, temporary panel that will be charged with hashing out the differences in the bills and preparing a final version for both chambers to consider. Party leaders will select a small group of lawmakers, likely from the House and Senate tax-writing panels in each chamber, who would then be approved by each chamber. That work could start as early as Monday, with many high-stakes issues to be worked through. The deadline of Dec. 31 is an artificial one, though - aimed partly at securing a victory well in advance of the 2018 congressional elections. Republicans would have until the end of 2018 before they lose their ability to clear final passage in the Senate without a filibuster. Reported by Zero Hedge 21 hours ago.
Tennessee Senator Bob Corker, who had cited concerns over the bill’s effects on federal deficits, was the only Republican dissenter. Corker, who is retiring after 2018, said in a statement ahead of the vote that he "wanted to get to yes" on the tax plan. "But at the end of the day, I am not able to cast aside my fiscal concerns and vote for legislation that I believe, based on the information I currently have, could deepen the debt burden on future generations,” he said.
Corker's dissent however was not enough to halt passage, and shortly thereafter Vice President Mike Pence presided over the final passage vote. GOP senators, who stayed on the Senate floor until the vote closed after midnight, broke out into applause after Pence announced the bill had passed. * *
*"This is a great day for the country," *Majority Leader Mitch McConnell (R-Ky.) said during a 2 a.m. press conference after the vote. "We have an opportunity now to make America more competitive, to keep jobs from being shipped off shore and to provide substantial relief for the middle class."
The bill would lower tax rates for individuals through 2025 and permanently cut the corporate tax rate from 35% to 20% (more details below). The bill’s tax cuts for individuals are temporary in order to comply with budget rules that the measure can’t add to the deficit after 10 years. The bill would also repeal ObamaCare’s individual mandate, a priority for President Trump and many Republicans.
* * *
The vote brings the GOP close to delivering a much-needed policy win for their party and President Donald Trump. After the vote, Trump said on Twitter that he looks forward to signing a final bill before Christmas. The president expressed gratitude to McConnell and Finance Committee Chairman Orrin Hatch for steering the measure through the Senate. “We are one step closer to delivering MASSIVE tax cuts for working families across America,” Trump wrote on Twitter.
We are one step closer to delivering MASSIVE tax cuts for working families across America. Special thanks to @SenateMajLdr Mitch McConnell and Chairman @SenOrrinHatch for shepherding our bill through the Senate. Look forward to signing a final bill before Christmas! pic.twitter.com/gmWTny3SfS
— Donald J. Trump (@realDonaldTrump) December 2, 2017
On Saturday morning, Trump followed up his praise to the Senate GOP, tweeting the "Biggest Tax Bill and Tax Cuts in history just passed in the Senate. Now these great Republicans will be going for final passage. Thank you to House and Senate Republicans for your hard work and commitment!"
Biggest Tax Bill and Tax Cuts in history just passed in the Senate. Now these great Republicans will be going for final passage. Thank you to House and Senate Republicans for your hard work and commitment!
— Donald J. Trump (@realDonaldTrump) December 2, 2017
* * *
Amid the republican jubilation over the passage of a bill which is heavily weighted to benefit corporations and pass-throughs, and will encourage all self-employed businesses to become LLCs, there was juist one problem: *nobody actually read the 479-page bill*.
As Montana Senator Jon Tester wrote late on Friday:
I was just handed a 479-page tax bill a few hours before the vote. One page literally has hand scribbled policy changes on it that can’t be read. This is Washington, D.C. at its worst. Montanans deserve so much better. pic.twitter.com/q6lTpXoXS0
— Senator Jon Tester (@SenatorTester) December 2, 2017
NY Governor Andrew Cuomo showed what the "handwritten notes on the page" looked like:
Senate Republicans are so desperate for a win they are going to pass a tax increase on New York with handwritten changes to the bill. pic.twitter.com/pT2Xvubiy2
— Andrew Cuomo (@NYGovCuomo) December 2, 2017
Commenting on this, Senate Democrat Charles Schumer noted that a set of last-minute revisions to the bill changed it in ways that had yet to be analyzed by the Joint Committee on Taxation, Congress’s official scorekeeper for the effects of tax legislation. “*Is this really how Republicans are going to rewrite the tax code? Scrawled like something on the back of a napkin?”* However, McConnell said the bill, the first text of which was introduced on Nov. 20, went “through the regular order.” He dismissed complaints like Schumer’s. “You complain about process when you’re losing,” McConnell said.
Bottom line: the chaotic process was similar to how Obamacare was passed on Christmas Eve in 2009: in fact maybe a slight improvement: at least this time Congress didn't have to "pass the bill to find out what is in it." And it's not like anyone reads these bills anyway.
So what happens next?
Before it goes to Trump, lawmakers will have to reconcile differences between the Senate bill and one the House passed last month, a process that will begin Monday. Although both versions share common topline elements, negotiations on individual provisions inserted to win votes, particularly in the Senate, may be protracted and difficult. The final product will end up being a central issue in the 2018 elections that will determine control of Congress.
“We’re going to take this message to the American people a year from now,” Senate Majority Leader Mitch McConnell said after the vote.
* * *
Among the major overhauls, *both the House and Senate measures would cut the corporate tax rate to 20% from 35% - though the Senate version would set that lower rate in 2019, a year later than the House bill would. *Also, the Senate bill, unlike the House version, would provide only temporary tax relief to individuals, ending tax cuts for them in 2026. *Both bills are expected to add more than $1.4 trillion to the federal deficit over 10 years*, before accounting for any economic growth. Bloomberg reported that last minute revisions to help shore up GOP support added about $32.5bn to the measure’s 10-year cost, according to a one-page analysis from the Congressional Budget Office.
The House and Senate bills also align on the contentious issue of individual deductions for state and local taxes: They’d eliminate all but a deduction for property taxes, which would be capped at $10,000. They differ on the home mortgage-interest deduction; the House bill would restrict that break to loans of $500,000 or less with regard to new purchases of homes. The Senate legislation would leave the current $1 million cap in place.
According to Bloomberg, the bills also differ on the tax rates they’d apply to multinational companies’ accumulated offshore earnings. The House bill would tax those profits at 14 percent for earnings held as cash and 7 percent for less-liquid assets. The revised Senate bill contains a lengthy section that has no direct mention of the rates, but a person familiar with the Senate plan said they’d be 14.5 percent for cash and 7.5 percent for less-liquid assets.
*The Senate also approved a 23% tax deduction on business income earned from partnerships, limited liabilities and other so-called pass-through businesses. *The House version would create a 25% tax rate for such business income, with restrictions on which businesses could qualify. Small businesses would get extra relief under the House legislation as well.
The House bill would also eliminate the estate tax, while the Senate version would limit the tax to fewer multimillion-dollar estates, but leave it in place. And after 2025, the limits would lift. Under current law, the estate tax applies a 40% levy to estates worth more than $5.49 million for individuals and $10.98 million for married couples. The Senate bill would temporarily double the exemption thresholds. The House bill would double the exemption thresholds, and then repeal the tax entirely in 2025.
As discussed previously, *the House bill would consolidate the current seven individual tax brackets to four, leaving the top tax rate at 39.6%*. The Senate bill would have *seven brackets *- with lower rates, and a top rate of 38.5 percent. As Bloomberg notes, "*studies have shown that many of the tax bill’s benefits would go to the highest earners - and some middle-class taxpayers might actually pay more - a finding that could impact the House-Senate talks*."
Most importantly, perhaps, the Senate bill includes a repeal of Obamacare’s mandate that most Americans have health insurance or pay a penalty. The House bill does not.
While we have yet to get confirmation, below is a list of last minute changes and revisions that made it into the final bill per Reuters:
· *PASS-THROUGHS: *Senators Ron Johnson and Steve Daines announced their support for the tax bill after securing agreement on a bigger tax break for the owners of pass-through enterprises, including small businesses, S-corporations, partnerships and sole-proprietorships. An original 17.4 percent deduction would rise to 23 percent.
· *FULL EXPENSING: *Senator Jeff Flake, who was a holdout over deficit concerns, agreed to vote "yes" after Republican leaders agreed to change a provision allowing the full expensing of business capital investments to sunset after five years. Flake worried that Congress would be unable to eliminate the benefit cold turkey, allowing it to bleed red ink for years to come. But the Arizona Republican says the change would instead phase out full expensing over three years beginning in year six.
· *RETIREMENT SAVINGS: *Senator Susan Collins said she persuaded Republican leaders to retain catch-up contributions to retirement accounts for church, charity, school and public employees.
· *MEDICAL EXPENSES: *Collins also said she was able to include language to reduce the threshold for deducting unreimbursed medical expenses for two years to 7.5 percent of household income from 10 percent.
· *STATE AND LOCAL PROPERTY TAXES: *Collins has proposed an amendment that would retain a federal deduction for up to $10,000 in state and local property taxes.
· *INDIVIDUAL ALTERNATIVE MINIMUM TAX: *Rescinding a proposed repeal of the AMT and instead increase exemption levels and phase-out thresholds is also on the table.
· *CORPORATE ALTERNATIVE MINIMUM TAX: *So is rescinding a proposed repeal of the corporate AMT.
· *REPATRIATION: *Another change could be to increase tax rates on U.S. corporate profits held overseas to 14 percent for liquid assets and 7 percent for illiquid holdings, up from 10 percent and 5 percent, respectively
Attention now shifts to a House-Senate conference committee - a specially appointed, temporary panel that will be charged with hashing out the differences in the bills and preparing a final version for both chambers to consider. Party leaders will select a small group of lawmakers, likely from the House and Senate tax-writing panels in each chamber, who would then be approved by each chamber. That work could start as early as Monday, with many high-stakes issues to be worked through. The deadline of Dec. 31 is an artificial one, though - aimed partly at securing a victory well in advance of the 2018 congressional elections. Republicans would have until the end of 2018 before they lose their ability to clear final passage in the Senate without a filibuster. Reported by Zero Hedge 21 hours ago.
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Why Calfornia is wincing over Trump-backed health plan associations
Just a few decades ago, small businesses in California often banded together to buy health insurance on the premise that a bigger pool of enrollees would get them a better deal.
Reported by CNNMoney 20 hours ago.
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The Senate passed the massive GOP tax bill in the middle of the night — here's what's in it
**
· *The Senate passed a massive tax reform bill overnight on Saturday.*
· *The bill would bring huge changes to individual and business taxes.*
· *Analyses show it would cause the federal deficit to balloon and give a boost to US economic growth.*
--------------------The Senate passed the Tax Cuts and Jobs Act (TCJA) just after 2 a.m. ET on Saturday, moving the US one step closer to the biggest overhaul of the federal tax code in more than 30 years.
The Senate bill would make sweeping changes to individual and business taxes, while also affecting various industries like healthcare. In all, the cuts total a little less than $1.5 trillion in revenue over 10 years.
The final bill is roughly 479 pages long. With provisions applying to everything from citrus trees to craft breweries, here's a quick rundown of the largest changes to the code in the bill:
· *Individual tax brackets:* The Senate bill would maintain the current seven individual brackets, but lower the rates and change the income levels to which they apply. Those changes end after 2025, when the bill would revert the brackets back to current law. Here's what it looks like for non-married individual filers (you can see the married brackets here »):
· *Obamacare's individual mandate:* The penalty for not having health insurance created by the Affordable Care Act, or Obamacare, would be abolished. The Congressional Budget Office says this would result in 13 million more people without coverage by 2027.
· *The corporate tax rate would become 20%:* This would plunge from the current 35% and, unlike the individual provisions, would be permanent.
· *Allow businesses to fully deduct business expenses:* Firms could fully deduct business expenses as soon as they spend money, an increase from the current 50% cap.
· *Increase the child tax credit:* The credit would jump to $2,000 per child from the current $1,000.
· *Increase the threshold for the alternative minimum tax*: The bill would raise the income level at which a tax filer would need to use the AMT, a parallel set of tax rules designed to ensure wealthy people don't take large enough deductions to eliminate their entire tax bill.
· *Change the inflation adjustment for individual tax brackets:* The bill would switch the rate of growth for tax brackets to the chained consumer price index from the normal consumer price index (CPI). Typically, chained CPI grows as a slower rate.
· *Give a deduction for pass-through businesses:* Businesses in which the owner takes the profits from the firm as income are known as pass-throughs (like limited liability corporations or S-corporations). These firms would be able to take a 23% deduction on this income. There are guardrails to make sure this does not apply to professional service firms like accounting firms or hedge funds.
· *The standard deduction:* The Senate TCJA would almost double the standard deduction to $24,000 for married filers and $12,000 for single filers.
· *The medical expense deduction:* Currently, if a person's annual medical expenses are above 10% of their qualified income, the amount above that threshold can be deducted. The Senate bill would temporarily lower that to 7.5% of income through 2018.
· *The estate tax:* Currently, if the estate of an individual is greater than $5.6 million, that person's heirs must pay taxes above that level. The bill would increase that threshold to $11 million.
· *The state and local tax deduction:* Taxpayers will be able to deduct up to $10,000 in state property taxes, but could no longer deduct state and local income or sales taxes.
· *Suspend a slew of itemized deductions and exemptions:* Tax breaks for everything from moving to commuting by bike would be eliminated.
*SEE ALSO: Trump appears to be softening on his 'red line' for massive corporate tax cuts*
Join the conversation about this story »
NOW WATCH: Vladimir Putin could secretly be one of the richest men in the world — an investigative reporter who spent 4 years in Russia explains Reported by Business Insider 16 hours ago.
· *The Senate passed a massive tax reform bill overnight on Saturday.*
· *The bill would bring huge changes to individual and business taxes.*
· *Analyses show it would cause the federal deficit to balloon and give a boost to US economic growth.*
--------------------The Senate passed the Tax Cuts and Jobs Act (TCJA) just after 2 a.m. ET on Saturday, moving the US one step closer to the biggest overhaul of the federal tax code in more than 30 years.
The Senate bill would make sweeping changes to individual and business taxes, while also affecting various industries like healthcare. In all, the cuts total a little less than $1.5 trillion in revenue over 10 years.
The final bill is roughly 479 pages long. With provisions applying to everything from citrus trees to craft breweries, here's a quick rundown of the largest changes to the code in the bill:
· *Individual tax brackets:* The Senate bill would maintain the current seven individual brackets, but lower the rates and change the income levels to which they apply. Those changes end after 2025, when the bill would revert the brackets back to current law. Here's what it looks like for non-married individual filers (you can see the married brackets here »):
· *Obamacare's individual mandate:* The penalty for not having health insurance created by the Affordable Care Act, or Obamacare, would be abolished. The Congressional Budget Office says this would result in 13 million more people without coverage by 2027.
· *The corporate tax rate would become 20%:* This would plunge from the current 35% and, unlike the individual provisions, would be permanent.
· *Allow businesses to fully deduct business expenses:* Firms could fully deduct business expenses as soon as they spend money, an increase from the current 50% cap.
· *Increase the child tax credit:* The credit would jump to $2,000 per child from the current $1,000.
· *Increase the threshold for the alternative minimum tax*: The bill would raise the income level at which a tax filer would need to use the AMT, a parallel set of tax rules designed to ensure wealthy people don't take large enough deductions to eliminate their entire tax bill.
· *Change the inflation adjustment for individual tax brackets:* The bill would switch the rate of growth for tax brackets to the chained consumer price index from the normal consumer price index (CPI). Typically, chained CPI grows as a slower rate.
· *Give a deduction for pass-through businesses:* Businesses in which the owner takes the profits from the firm as income are known as pass-throughs (like limited liability corporations or S-corporations). These firms would be able to take a 23% deduction on this income. There are guardrails to make sure this does not apply to professional service firms like accounting firms or hedge funds.
· *The standard deduction:* The Senate TCJA would almost double the standard deduction to $24,000 for married filers and $12,000 for single filers.
· *The medical expense deduction:* Currently, if a person's annual medical expenses are above 10% of their qualified income, the amount above that threshold can be deducted. The Senate bill would temporarily lower that to 7.5% of income through 2018.
· *The estate tax:* Currently, if the estate of an individual is greater than $5.6 million, that person's heirs must pay taxes above that level. The bill would increase that threshold to $11 million.
· *The state and local tax deduction:* Taxpayers will be able to deduct up to $10,000 in state property taxes, but could no longer deduct state and local income or sales taxes.
· *Suspend a slew of itemized deductions and exemptions:* Tax breaks for everything from moving to commuting by bike would be eliminated.
*SEE ALSO: Trump appears to be softening on his 'red line' for massive corporate tax cuts*
Join the conversation about this story »
NOW WATCH: Vladimir Putin could secretly be one of the richest men in the world — an investigative reporter who spent 4 years in Russia explains Reported by Business Insider 16 hours ago.
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Taxpayer-funded abortion law met with Illinois lawsuit
Springfield, Ill., Dec 2, 2017 / 01:00 pm (CNA/EWTN News).- A new Illinois law requiring public funding of elective abortions is opposed by pro-life groups and taxpayers who have sued the state, calling the measure illegal.
“The people of Illinois totally reject taxpayer-funded abortions,” said Peter Breen, Special Counsel for the Thomas More Society, a non-profit legal group in Chicago, in a statement released Thursday..
“Even apart from the sincere moral objections that many folks have to paying for abortions, there is no money in this year’s Illinois state budget to pay for them,” Breen continued.
House Bill 40 was signed into law by Illinois governor Bruce Rauner in late September. Cardinal Blase Cupich of Chicago criticized the governor, saying that he was disappointed Rauner had broken promises to veto the bill, according to the Chicago Tribune.
If it takes effect, the new law will allow taxpayer dollars to fund free abortions for individuals with Medicaid coverage, and for state employees with health insurance, throughout all nine months of pregnancy.
There would be no limit on the number of abortions covered by Medicaid and no limit on the amount of money spent on abortions. According to the Thomas More Society, this could mean that state would pay between $15-$30 million for abortions, funding as many as 30,000 abortions annually.
The taxpayer lawsuit, which was filed in the Sangamon County Circuit Court and drafted by Breen, charges that the law is illegal, because there are not adequate funds to pay for elective abortions while still fulfilling the balanced budget requirements of the Illinois Constitution.
Among the groups supporting the complain are the Diocese of Springfield, legislators, and pro-life groups, including the Pro-Life Action League, the Illinois Right to Life Action, Illinois Federation for Right to Life, and a handful of local pro-life organizations.
“Regardless of your feelings about abortion, it is incredibly fiscally irresponsible to enact a law designed to spend millions of dollars that Illinois does not have,” Breen said.
“The state legislative process has steps have must be correctly followed in order to prevent budget-busting laws like this from being ramrodded through. It is part of our civic process of checks and balances.”
The lawsuit will be heard by Associate Judge Brian T. Otwell on Dec. 7 at the Sangamon County Courthouse. Reported by CNA 15 hours ago.
“The people of Illinois totally reject taxpayer-funded abortions,” said Peter Breen, Special Counsel for the Thomas More Society, a non-profit legal group in Chicago, in a statement released Thursday..
“Even apart from the sincere moral objections that many folks have to paying for abortions, there is no money in this year’s Illinois state budget to pay for them,” Breen continued.
House Bill 40 was signed into law by Illinois governor Bruce Rauner in late September. Cardinal Blase Cupich of Chicago criticized the governor, saying that he was disappointed Rauner had broken promises to veto the bill, according to the Chicago Tribune.
If it takes effect, the new law will allow taxpayer dollars to fund free abortions for individuals with Medicaid coverage, and for state employees with health insurance, throughout all nine months of pregnancy.
There would be no limit on the number of abortions covered by Medicaid and no limit on the amount of money spent on abortions. According to the Thomas More Society, this could mean that state would pay between $15-$30 million for abortions, funding as many as 30,000 abortions annually.
The taxpayer lawsuit, which was filed in the Sangamon County Circuit Court and drafted by Breen, charges that the law is illegal, because there are not adequate funds to pay for elective abortions while still fulfilling the balanced budget requirements of the Illinois Constitution.
Among the groups supporting the complain are the Diocese of Springfield, legislators, and pro-life groups, including the Pro-Life Action League, the Illinois Right to Life Action, Illinois Federation for Right to Life, and a handful of local pro-life organizations.
“Regardless of your feelings about abortion, it is incredibly fiscally irresponsible to enact a law designed to spend millions of dollars that Illinois does not have,” Breen said.
“The state legislative process has steps have must be correctly followed in order to prevent budget-busting laws like this from being ramrodded through. It is part of our civic process of checks and balances.”
The lawsuit will be heard by Associate Judge Brian T. Otwell on Dec. 7 at the Sangamon County Courthouse. Reported by CNA 15 hours ago.
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Official: CHIP funds for Vermont to run out early next year
MONTPELIER, Vt. (AP) — Vermont health officials say the state will exhaust its federal funding through the Children’s Health Insurance Program early next year. CHIP serves about 9 million children nationwide and the U.S. Congress allowed funding for the program to expire in September. The Burlington Free Press reports CHIP in Vermont is a funding […]
Reported by Seattle Times 23 hours ago.
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Nevada wins short reprieve in child health care funds fight
LAS VEGAS (AP) — Nevada elected officials have won a short reprieve as they press Congress to reauthorize money for a Children’s Health Insurance Program that serves more than 40,000 children a year. Republican U.S. Sen. Dean Heller is co-sponsoring a bipartisan measure that would allocate funds for the CHIP program through the end of […]
Reported by Seattle Times 20 hours ago.
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CVS Health is buying Aetna for $69 billion in 2017's biggest deal
· *CVS Health is buying Aetna for $69 billion.*
· *The deal that was rumored for months should finally be announced on Sunday.*
· *The merger could reshape the American health care system as we know it.*
--------------------CVS Health is buying Aetna, multiple sources told multiple media outlets on Sunday.
The pharmacy giant is acquiring the third largest insurer in the US in a $69 billion deal.
The deal creates a new type of company that includes a health insurer, a retail pharmacy, and a company that negotiates prescription drug prices with drugmakers called a pharmacy benefits manager. It's the biggest merger to happen in the US in 2017.
The timing of this massive acquisition is no coincidence. Speculation that Amazon might be getting into the pharmacy business has been rampant for months, and the company's notorious for stepping into new businesses and crushing the competition with low price, fast delivery, and its massive network of loyal shoppers.
*What this means for how your medication gets paid for*
With the Aetna deal, CVS wouldn't be alone in controlling both the insurer and PBM part of paying for prescriptions. UnitedHealthcare, for example, owns the PBM OptumRx, while Anthem, which owns a variety of Blue Cross Blue Shield health insurance firms, will be launching its own PBM called IngenioRx.
Essentially, CVS would own every step of the prescription drug process with the exception of drug wholesalers, which are in charge of shipping drugs to pharmacies and hospitals, and the pharmaceutical companies that actually make the drugs. That would keep much of the money changing hands within the same company.
Here's a chart explaining how a drug travels from pharmaceutical manufacturer to a patient, and who takes a cut in the process. It's a complicated web of payments and rebates, but the simplified outcome of a deal that puts pharmacy, insurer, and PBM in one company is that the combined business walks away with more of a drug's sale price in the end.
With the Aetna deal, CVS would control everything that happens once a wholesaler has handed off the drug.
*SEE ALSO: CVS is plotting a $69 billion takeover — and it has a lot to do with fending off Amazon*
Join the conversation about this story »
NOW WATCH: The stock market is flashing warning signs Reported by Business Insider 16 hours ago.
· *The deal that was rumored for months should finally be announced on Sunday.*
· *The merger could reshape the American health care system as we know it.*
--------------------CVS Health is buying Aetna, multiple sources told multiple media outlets on Sunday.
The pharmacy giant is acquiring the third largest insurer in the US in a $69 billion deal.
The deal creates a new type of company that includes a health insurer, a retail pharmacy, and a company that negotiates prescription drug prices with drugmakers called a pharmacy benefits manager. It's the biggest merger to happen in the US in 2017.
The timing of this massive acquisition is no coincidence. Speculation that Amazon might be getting into the pharmacy business has been rampant for months, and the company's notorious for stepping into new businesses and crushing the competition with low price, fast delivery, and its massive network of loyal shoppers.
*What this means for how your medication gets paid for*
With the Aetna deal, CVS wouldn't be alone in controlling both the insurer and PBM part of paying for prescriptions. UnitedHealthcare, for example, owns the PBM OptumRx, while Anthem, which owns a variety of Blue Cross Blue Shield health insurance firms, will be launching its own PBM called IngenioRx.
Essentially, CVS would own every step of the prescription drug process with the exception of drug wholesalers, which are in charge of shipping drugs to pharmacies and hospitals, and the pharmaceutical companies that actually make the drugs. That would keep much of the money changing hands within the same company.
Here's a chart explaining how a drug travels from pharmaceutical manufacturer to a patient, and who takes a cut in the process. It's a complicated web of payments and rebates, but the simplified outcome of a deal that puts pharmacy, insurer, and PBM in one company is that the combined business walks away with more of a drug's sale price in the end.
With the Aetna deal, CVS would control everything that happens once a wholesaler has handed off the drug.
*SEE ALSO: CVS is plotting a $69 billion takeover — and it has a lot to do with fending off Amazon*
Join the conversation about this story »
NOW WATCH: The stock market is flashing warning signs Reported by Business Insider 16 hours ago.
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CVS set to announce $69B deal to buy Aetna, according to reports
CVS Health Corp. has reportedly agreed to buy health insurance giant Aetna Inc. in a $69 billion deal, according to multiple reports. According to Reuters, Aetna's board of directors on Sunday approved the deal to sell to CVS. CVS will reportedly purchase Aetna at $207 a share, a 14 percent premium on the stock's closing price on Friday. CVS will pay for the deal mostly with cash, but will use its own stock to pay for 30 percent of the purchase price, Reuters said. A spokesman for Rhode Island-based…
Reported by bizjournals 16 hours ago.
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Amazon Strikes Again: CVS To Buy Aetna For $69BN In Year's Largest Deal, "Reshaping Health Care"
A deal that was months in the making is finally official, with Aetna's board of directors approving on Sunday the health insurer’s sale to drugstore chain operator CVS Health Corp for approximately $207 per share in cash and stock, in a deal worth $67 billion, multiple news sources reported on Sunday afternoon. The purchase price represents a premium of 29% to where Aetna shares were trading before the WSJ first reported that the two companies were in talks in October.
The deal will be this year’s largest corporate acquisition, and in combining one of the nation’s largest pharmacy benefits managers (PBMs) and pharmacy operators with one of its oldest health insurers, *will "reshape health care" by bringing a large insurer and a big provider of pharmacy services under one roof.*
According to the agreed terms of the deal, which will be announced later on Sunday, Aetna shareholders will receive $145 per share in cash and 0.8378 CVS Health shares for each Aetna share. According to Reuters, "Aetna shareholders will own about 22% of the combined company, while CVS shareholders will own the remainder." As part of the acquisition, three Aetna directors, including Aetna’s Chairman and CEO Mark Bertolini, will join CVS’s board of directors. After the deal closes, Aetna will operate as a separate unit run by members of the current management.
The acquisition will be financed with a mix of cash and debt. Barclays, Goldman Sachs and Bank of America have committed to provide $49 billion of financing, Bloomberg reported.
*With Aetna currently employing 49,500 while CVS has 204,000 full and part-time employees, the combined company will boast a quarter million workers, *if only for the time being. The deal, which is expected to close in the second half of 2018, *will create cost savings of about $750 million, which means tens of thousands of layoffs. *
Some more on the companies' background: CVS, with annual revenue of $178 billion, is a major pharmacy-benefits manager in addition to its vast collection of drugstores, some of which already have retail clinics. Aetna, with revenue of around $63 billion, is the third-largest U.S. health insurer, providing coverage to around 22.2 million members enrolled in employer, Medicare, Medicaid and other plans.
The deal comes as healthcare payers and pharmacies are responding to rapidly changing factors, including Obamacare, rising drug prices "and the threat of competition from online retailers such as Amazon.com", Reuters noted. In fact, as Morgan Stanley pointed out two weeks ago, Amazon's imminent entry into the healthcare sector has been cited as one of the primary catalysts behind the AET/CVS deal:
As a reminder, this is how Morgan Stanley summarized the rationale behind the just announced merger:
Drug retailers have the most opportunities to adjust their business models and lower cost structures to defend against Amazon. *Within the drug supply chain, the threat of Amazon’s entry into drug retail is accelerating vertical integration, and is cited as a driver behind the rumored CVS/Aetna merger. *In our view, the combination would diversify profits away from the supply chain, help create a narrow preferred network, and act as a first step in repurposing the retail footprint to create a new healthcare-retail delivery model. If drug retailers don't change this model, we estimate ~10% risk to profits. CVS has also announced free same-day delivery in New York City, proactively preparing for a potential Prime Now entry, in our view.
As a result, the deal *“feels more defense than offense,” *Ana Gupte, an analyst with Leerink Partners LLC, said recently. In Aetna’s case, “I don’t see a path to growth” in its current configuration, she said.
“One of the problems with the health-care system is it’s so fragmented and there’s so little coordination,” Bessemer Ventures' Steve Kraus told Bloomberg. “A better vertically integrated less-siloed system is a good thing in my mind.”
In this context, Reuters points out that CVS plans to use its low-cost clinics *to eventually save more than $1 billion per year on health care costs for Aetna’s roughly 23 million medical members*. It adds that a combined insurer and PBM will also likely be better placed to negotiate lower drug prices, and the arrangement could boost sales for CVS’s front-of-store retail business.
It's not just imminent layoffs however, as the combined company expects to invest billions in the coming years to add clinics and services, largely financed by diverting funds away from other planned investments.
That could eventually cut costs substantially, with the clinics serving as an alternative to more expensive hospital emergency room visits.
Meanwhile, deeper collaboration between Aetna’s insurance business and CVS’s PBM division could drive down drug costs by adding clients and boosting the PBM’s leverage with drugmakers.
In recent years, independent PBMs have been criticized for keeping drug prices high amid potential conflicts of interest with insurance company clients, because they could potentially keep cost savings from drug negotiations rather than passing them on to patients.
Alternatively, PBM margins have been pressured and health insurers have sought to cut costs amid steep prescription drug price rises and requirements to care for even the sickest patients under the Affordable Care Act.
* * *
Analysts cited by Reuters said *the CVS-Aetna deal could prompt other healthcare sector mega-mergers, as rivals scramble to emulate the strategy*.
It could spur a merger between Walgreens Boots Alliance Inc and Humana Inc, or between Humana and Wal-Mart Stores Inc, Ana Gupte, analyst at Leerink Partners, said recently.
On Nov. 30, Express Scripts Holding Co.’s top executive said the company would be open to a deal at the right price, though wasn’t actively looking for one. “We don’t need to sell to be very successful in the future, but we are always open to others who may all of sudden conclude they want what we have,” Express Scripts CEO Tim Wentworth said in an interview. He also mentioned the possibility of partnering with Amazon on a drug distribution arrangement.
The deal, and any subsequent follow through, is not without risk of regulatory intervention: last year Aetna tried to buy rival Humana Inc to gain leverage to control costs, but antitrust regulators killed the deal as well as a proposed merger between Anthem and Cigna. Furthermore it is unclear if the DOJ, which recently sued to block the Time Warner-AT&T deal, won't issue another antitrust veto. That could happen if the DOJ shifts its attention to vertical mergers:
Although CVS and Aetna’s planned merger does not directly consolidate the health insurance or pharmaceutical industries, the U.S. Department of Justice has been taking a closer look at so-called vertical mergers, where the companies are not direct competitors.
Last month, the Justice Department sued to block AT&T Inc’s planned $85.4 billion merger with Time Warner Inc, saying the integration of a content producer with a distributor could reduce consumer choice.
Reuters concedes that "the CVS-Aetna deal could attract similar scrutiny if regulators feared it could block Aetna customers from frequenting other pharmacies or contracting with other PBMs" even as four antitrust experts said there is little doubt the deal will be approved, although it might need to meet conditions to convince antitrust enforcers to sign off.
It is unclear whether it would be evaluated by the U.S. Federal Trade Commission or the Justice Department but that decision might be made based on which agency is less busy, said Matthew Cantor of law firm Constantine Cannon.
“(The companies) want the FTC to get it. The reason that the FTC is better at this point is that the Justice Department has just broken with decades of precedent of how to deal with vertical mergers,” said Cantor, referring to the decision to refuse conduct remedies and file a lawsuit to stop AT&T from buying Time Warner.
According to Bloomberg Intelligence's Jennifer Rie, the CVS-Aetna deal antitrust prospects may depend on which U.S. regulator is tasked with reviewing it.
The Federal Trade Commission has been less critical of consolidation among companies in adjacent businesses, known as vertical consolidation. The Justice Department, on the other hand, last month sued to block the merger of AT&T Inc. and Time Warner Inc., a vertical deal.
Michael Newshel, an analyst at Evercore ISI, said the DOJ effort to block the AT&T-Time Warner deal does raises concerns but a CVS-Aetna deal does have a path forward. Aetna would likely need to divest some or all of its Medicare drug plan business, he said.
In addition to regulatory risk, the combination faces substantial challenges, "including the huge operational task of knitting together the companies’ diverse operations so that customer experiences are smooth and seamless. The deal isn’t likely to deliver as many cost-cutting benefits as combinations with more direct overlap, such as Aetna’s scuttled acquisition of Humana, analysts said. CVS will need to keep much of Aetna’s infrastructure since it doesn’t currently provide health insurance."
As noted by the WSJ, as part of the deal CVS plans to repurpose portions of its pharmacies so they become community health centers where customers can go to get answers to more questions about their health and coverage and how to manage the cost of it. The pharmacies will have space dedicated to wellness, and provide services for things like vision, hearing and nutrition. Reported by Zero Hedge 14 hours ago.
The deal will be this year’s largest corporate acquisition, and in combining one of the nation’s largest pharmacy benefits managers (PBMs) and pharmacy operators with one of its oldest health insurers, *will "reshape health care" by bringing a large insurer and a big provider of pharmacy services under one roof.*
According to the agreed terms of the deal, which will be announced later on Sunday, Aetna shareholders will receive $145 per share in cash and 0.8378 CVS Health shares for each Aetna share. According to Reuters, "Aetna shareholders will own about 22% of the combined company, while CVS shareholders will own the remainder." As part of the acquisition, three Aetna directors, including Aetna’s Chairman and CEO Mark Bertolini, will join CVS’s board of directors. After the deal closes, Aetna will operate as a separate unit run by members of the current management.
The acquisition will be financed with a mix of cash and debt. Barclays, Goldman Sachs and Bank of America have committed to provide $49 billion of financing, Bloomberg reported.
*With Aetna currently employing 49,500 while CVS has 204,000 full and part-time employees, the combined company will boast a quarter million workers, *if only for the time being. The deal, which is expected to close in the second half of 2018, *will create cost savings of about $750 million, which means tens of thousands of layoffs. *
Some more on the companies' background: CVS, with annual revenue of $178 billion, is a major pharmacy-benefits manager in addition to its vast collection of drugstores, some of which already have retail clinics. Aetna, with revenue of around $63 billion, is the third-largest U.S. health insurer, providing coverage to around 22.2 million members enrolled in employer, Medicare, Medicaid and other plans.
The deal comes as healthcare payers and pharmacies are responding to rapidly changing factors, including Obamacare, rising drug prices "and the threat of competition from online retailers such as Amazon.com", Reuters noted. In fact, as Morgan Stanley pointed out two weeks ago, Amazon's imminent entry into the healthcare sector has been cited as one of the primary catalysts behind the AET/CVS deal:
As a reminder, this is how Morgan Stanley summarized the rationale behind the just announced merger:
Drug retailers have the most opportunities to adjust their business models and lower cost structures to defend against Amazon. *Within the drug supply chain, the threat of Amazon’s entry into drug retail is accelerating vertical integration, and is cited as a driver behind the rumored CVS/Aetna merger. *In our view, the combination would diversify profits away from the supply chain, help create a narrow preferred network, and act as a first step in repurposing the retail footprint to create a new healthcare-retail delivery model. If drug retailers don't change this model, we estimate ~10% risk to profits. CVS has also announced free same-day delivery in New York City, proactively preparing for a potential Prime Now entry, in our view.
As a result, the deal *“feels more defense than offense,” *Ana Gupte, an analyst with Leerink Partners LLC, said recently. In Aetna’s case, “I don’t see a path to growth” in its current configuration, she said.
“One of the problems with the health-care system is it’s so fragmented and there’s so little coordination,” Bessemer Ventures' Steve Kraus told Bloomberg. “A better vertically integrated less-siloed system is a good thing in my mind.”
In this context, Reuters points out that CVS plans to use its low-cost clinics *to eventually save more than $1 billion per year on health care costs for Aetna’s roughly 23 million medical members*. It adds that a combined insurer and PBM will also likely be better placed to negotiate lower drug prices, and the arrangement could boost sales for CVS’s front-of-store retail business.
It's not just imminent layoffs however, as the combined company expects to invest billions in the coming years to add clinics and services, largely financed by diverting funds away from other planned investments.
That could eventually cut costs substantially, with the clinics serving as an alternative to more expensive hospital emergency room visits.
Meanwhile, deeper collaboration between Aetna’s insurance business and CVS’s PBM division could drive down drug costs by adding clients and boosting the PBM’s leverage with drugmakers.
In recent years, independent PBMs have been criticized for keeping drug prices high amid potential conflicts of interest with insurance company clients, because they could potentially keep cost savings from drug negotiations rather than passing them on to patients.
Alternatively, PBM margins have been pressured and health insurers have sought to cut costs amid steep prescription drug price rises and requirements to care for even the sickest patients under the Affordable Care Act.
* * *
Analysts cited by Reuters said *the CVS-Aetna deal could prompt other healthcare sector mega-mergers, as rivals scramble to emulate the strategy*.
It could spur a merger between Walgreens Boots Alliance Inc and Humana Inc, or between Humana and Wal-Mart Stores Inc, Ana Gupte, analyst at Leerink Partners, said recently.
On Nov. 30, Express Scripts Holding Co.’s top executive said the company would be open to a deal at the right price, though wasn’t actively looking for one. “We don’t need to sell to be very successful in the future, but we are always open to others who may all of sudden conclude they want what we have,” Express Scripts CEO Tim Wentworth said in an interview. He also mentioned the possibility of partnering with Amazon on a drug distribution arrangement.
The deal, and any subsequent follow through, is not without risk of regulatory intervention: last year Aetna tried to buy rival Humana Inc to gain leverage to control costs, but antitrust regulators killed the deal as well as a proposed merger between Anthem and Cigna. Furthermore it is unclear if the DOJ, which recently sued to block the Time Warner-AT&T deal, won't issue another antitrust veto. That could happen if the DOJ shifts its attention to vertical mergers:
Although CVS and Aetna’s planned merger does not directly consolidate the health insurance or pharmaceutical industries, the U.S. Department of Justice has been taking a closer look at so-called vertical mergers, where the companies are not direct competitors.
Last month, the Justice Department sued to block AT&T Inc’s planned $85.4 billion merger with Time Warner Inc, saying the integration of a content producer with a distributor could reduce consumer choice.
Reuters concedes that "the CVS-Aetna deal could attract similar scrutiny if regulators feared it could block Aetna customers from frequenting other pharmacies or contracting with other PBMs" even as four antitrust experts said there is little doubt the deal will be approved, although it might need to meet conditions to convince antitrust enforcers to sign off.
It is unclear whether it would be evaluated by the U.S. Federal Trade Commission or the Justice Department but that decision might be made based on which agency is less busy, said Matthew Cantor of law firm Constantine Cannon.
“(The companies) want the FTC to get it. The reason that the FTC is better at this point is that the Justice Department has just broken with decades of precedent of how to deal with vertical mergers,” said Cantor, referring to the decision to refuse conduct remedies and file a lawsuit to stop AT&T from buying Time Warner.
According to Bloomberg Intelligence's Jennifer Rie, the CVS-Aetna deal antitrust prospects may depend on which U.S. regulator is tasked with reviewing it.
The Federal Trade Commission has been less critical of consolidation among companies in adjacent businesses, known as vertical consolidation. The Justice Department, on the other hand, last month sued to block the merger of AT&T Inc. and Time Warner Inc., a vertical deal.
Michael Newshel, an analyst at Evercore ISI, said the DOJ effort to block the AT&T-Time Warner deal does raises concerns but a CVS-Aetna deal does have a path forward. Aetna would likely need to divest some or all of its Medicare drug plan business, he said.
In addition to regulatory risk, the combination faces substantial challenges, "including the huge operational task of knitting together the companies’ diverse operations so that customer experiences are smooth and seamless. The deal isn’t likely to deliver as many cost-cutting benefits as combinations with more direct overlap, such as Aetna’s scuttled acquisition of Humana, analysts said. CVS will need to keep much of Aetna’s infrastructure since it doesn’t currently provide health insurance."
As noted by the WSJ, as part of the deal CVS plans to repurpose portions of its pharmacies so they become community health centers where customers can go to get answers to more questions about their health and coverage and how to manage the cost of it. The pharmacies will have space dedicated to wellness, and provide services for things like vision, hearing and nutrition. Reported by Zero Hedge 14 hours ago.
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CVS is buying Aetna in massive deal that could transform health care
CVS is buying health insurance giant Aetna, the companies announced Sunday.
Reported by CNNMoney 12 hours ago.
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Trump's Tax Cut - FDR Would Be Envious
Authored by Tom Luongo,
*The first rule of politics is feather your own nest. * President Trump’s tax cut proposal always had this in mind.
*Congress has passed a bill which tinkers at the edges but leaves most of Trump’s core proposal intact.* It’s obvious to me that Trump has the political acumen of another brilliant U.S. politician, the loathsome Franklin Delano Roosevelt.
Yeah, I’m not a fan of FDR. But I do respect his political skill in the same way I respect the way sharks hunt their prey.
*FDR repackaged Herbert Hoover’s Works Progress Administration as “The New Deal” which set him on a course of near perpetual re-election thanks to the wealth redistribution it engendered.*
Am I saying the New Deal was nothing more than a vote-buying scheme? Yeah, pretty much. FDR knew that politicizing the Supreme Court and pushing the New Deal, even if he did it for the right reasons, would* reshape the Federal election landscape for generations.*
Trump’s tax plan will have similar effects. And it’s why there was such staunch opposition to it in Congress.
*Democratic leadership understand that the triple-whammy of eliminating the State and Local Tax exemption, lowering corporate tax rate to 20% and incentivizing the on-shoring of corporate profits held overseas will gut their support at the electoral college level.*
*Why?*
*Mr. Trump, Tear Down that Blue Wall!*
*The incentives are now aligned to accelerate the exodus of workers and businesses from high tax, high-regulation states like New York, New Jersey, Illinois and California to low-tax, lower regulation states like Florida, Georgia, Tennessee and Texas.*
*In other words the Blue Wall will crumble.*
The bill is not 48 hours old and already the mainstream media is trying to tell us how horrible this is. From CBS News via MSN.com comes a four-way case study of taxpayers under the new law, in three of their four case studies taxes drop significantly. In one they try and scare old people about how their health insurance costs will rise.
But, in gutting Obamacare, everyone’s health care costs are going to fall, so….
In that one case, John and Maya their “Married Couple with Two Kids” become the “Married Couple with One Kid from New Jersey,” does the taxpayer get the shaft.
The whole article is a mess of gamesmanship. A married couple with 1 kid making a combined $71,000 should not be living in a $600,000 house!
In New Jersey!
Putting 10% of their income into their 401k!
Do they eat dirt?
That version of John and Maya doesn’t exist. And if they do, they shouldn’t. And the tax code should not be gamed to allow them to do so, because then it’s a tax subsidy from the self-employed to the fake middle class.
*In fact, another benefit of this tax code will be the bursting of over-priced middle class real estate in high-tax states as John and Maya face financial reality.*
*In software parlance, that’s not a bug, it’s a feature. It’s called political retribution.*
In the current market John and Maya are better off selling their house, taking the equity, buying a nice house in a secondary market in Florida or Alabama and living mortgage free or nearly so while building new careers locally.
They could practically live on the child and EIC while working at Home Depot, thanks to 1) the increased exemptions for lower-income workers and 2) local construction will be booming.
*Bringing Home the Bacon*
*Turning to the onshoring of corporate profits. All of that capital returning from overseas to invest in infrastructure and production won’t go to the big ‘Blue Wall’ states like New Jersey but to the new production belt in places like Chattanooga.*
That’s where the jobs will be and that’s where the people will gravitate. Moreover, the effect I just described for John and Maya will become an epidemic in places like L.A. (where Hollywood will be getting smaller) and Seattle (software development is moving towards blockchain).
These people will see their overall tax bill rise unless they make the rational choice to sell their over-valued property to some European or Chinese ‘investor’ looking to flee economic chaos locally, pocket the profit and cut their tax bill in half.
Congress’ Joint Commission on Taxes severely low-balled the amount of capital U.S. firms will repatriate. According to this article by Larry Kudlow (not normally someone I would quote, but here he’s rational), the JCT estimated just $500 billion out of $3 trillion in offshore corporate profits will come home over 3 years.
And then they said 1-2% growth, which, with a tax structure like this, is a low ball. The JCT’s own rate of estimated repatriation ($280 billion in 2018) alone would add more than 1% to GDP as corporate savings is added to Gross National Spending. So, spare me the class-warfare histrionics.
This is mainly how they came to conclude the tax bill would cost us $1.4 trillion over ten years. That’s $140 billion a year. Surely, 1) we can cut spending by that much and 2) we waste ten times that in off-budget wars and subsidies every year.
There’s plenty of room to cover the ‘costs’ of this tax cut.
*The FOMO Trade*
The tax bill itself will make the U.S. more competitive than the sclerotic social welfare states in Europe and Japan. Capital flight into U.S. real estate as a safe-haven play will keep demand up as Americans migrate away from the taxes and Europeans and Asians flee currency devaluation and bursting debt bubbles.
The old tax system was designed to make us competitive with Europe. In other words, normalizing our tax system with theirs while we still pay for their defense, the U.N. and bear the burden of the world’s reserve currency and all the issues of Triffin’s paradox that entails.
In short, the tax code was designed to redistribute America’s wealth around the world in pure Marxist style. Raise our costs instead of forcing them to lower theirs.
*In fact, this tax bill will only accelerate those processes already underway. The Dow is making new highs while the German DAX is struggling.*
That fire under the Dow Jones and the cryptocurrency markets is only just beginning as the middle class is freed from the yoke of Obamacare to begin taking part in the current runaway bull markets.
*This year’s tax refunds will fuel a whole lotta FOMO, folks.*
*A Good Start*
*The tax cut bill moving through Congress now is by no means perfect. *Eliminating income taxes is the ideal. But, that’s not possible so in evaluating it I’m looking for whether it solves the big problem, namely the incentives to push capital out of the U.S.
It does this.
Lowering the corporate tax rate alone is a major win for Trump. Yes, personal tax rates need to go down. Yes, a lot more work needs to be done for small entrepreneurs and the self-employed who are still massively disadvantaged by the code. But, this bill is a major step in the right direction of reversing the flow of real wealth and incentivizing it to stay onshore.
*Don’t let the Michael Moore’s of the world influence you one whit. That man has nine houses and is a multi-millionaire. He’s also a fat, stupid hypocrite and an economic ignoramus. Fix the business environment first. Invite capital back onshore. Get U.S. corporates spending at home.*
Meanwhile Ted Cruz, Rand Paul and the incoming freshman class of MAGA guys can amend this bill to make it even better for the middle class. In Hollywood terms, they can fix this in post-production.
The cuts that Trump has ordered to the cabinet departments will begin having the biggest impact in the second half of his term.
The capital flight I just described will add to the mix, and for a short time, the U.S. will likely see an economic boom it hasn’t seen since the days of Volcker, Stockman and Reagan. And that, my friends, is what the Democrats truly fear, a 2020 election that puts Kamala Harris into the role of Walter Mondale.
*FDR would be proud.* Reported by Zero Hedge 12 hours ago.
*The first rule of politics is feather your own nest. * President Trump’s tax cut proposal always had this in mind.
*Congress has passed a bill which tinkers at the edges but leaves most of Trump’s core proposal intact.* It’s obvious to me that Trump has the political acumen of another brilliant U.S. politician, the loathsome Franklin Delano Roosevelt.
Yeah, I’m not a fan of FDR. But I do respect his political skill in the same way I respect the way sharks hunt their prey.
*FDR repackaged Herbert Hoover’s Works Progress Administration as “The New Deal” which set him on a course of near perpetual re-election thanks to the wealth redistribution it engendered.*
Am I saying the New Deal was nothing more than a vote-buying scheme? Yeah, pretty much. FDR knew that politicizing the Supreme Court and pushing the New Deal, even if he did it for the right reasons, would* reshape the Federal election landscape for generations.*
Trump’s tax plan will have similar effects. And it’s why there was such staunch opposition to it in Congress.
*Democratic leadership understand that the triple-whammy of eliminating the State and Local Tax exemption, lowering corporate tax rate to 20% and incentivizing the on-shoring of corporate profits held overseas will gut their support at the electoral college level.*
*Why?*
*Mr. Trump, Tear Down that Blue Wall!*
*The incentives are now aligned to accelerate the exodus of workers and businesses from high tax, high-regulation states like New York, New Jersey, Illinois and California to low-tax, lower regulation states like Florida, Georgia, Tennessee and Texas.*
*In other words the Blue Wall will crumble.*
The bill is not 48 hours old and already the mainstream media is trying to tell us how horrible this is. From CBS News via MSN.com comes a four-way case study of taxpayers under the new law, in three of their four case studies taxes drop significantly. In one they try and scare old people about how their health insurance costs will rise.
But, in gutting Obamacare, everyone’s health care costs are going to fall, so….
In that one case, John and Maya their “Married Couple with Two Kids” become the “Married Couple with One Kid from New Jersey,” does the taxpayer get the shaft.
The whole article is a mess of gamesmanship. A married couple with 1 kid making a combined $71,000 should not be living in a $600,000 house!
In New Jersey!
Putting 10% of their income into their 401k!
Do they eat dirt?
That version of John and Maya doesn’t exist. And if they do, they shouldn’t. And the tax code should not be gamed to allow them to do so, because then it’s a tax subsidy from the self-employed to the fake middle class.
*In fact, another benefit of this tax code will be the bursting of over-priced middle class real estate in high-tax states as John and Maya face financial reality.*
*In software parlance, that’s not a bug, it’s a feature. It’s called political retribution.*
In the current market John and Maya are better off selling their house, taking the equity, buying a nice house in a secondary market in Florida or Alabama and living mortgage free or nearly so while building new careers locally.
They could practically live on the child and EIC while working at Home Depot, thanks to 1) the increased exemptions for lower-income workers and 2) local construction will be booming.
*Bringing Home the Bacon*
*Turning to the onshoring of corporate profits. All of that capital returning from overseas to invest in infrastructure and production won’t go to the big ‘Blue Wall’ states like New Jersey but to the new production belt in places like Chattanooga.*
That’s where the jobs will be and that’s where the people will gravitate. Moreover, the effect I just described for John and Maya will become an epidemic in places like L.A. (where Hollywood will be getting smaller) and Seattle (software development is moving towards blockchain).
These people will see their overall tax bill rise unless they make the rational choice to sell their over-valued property to some European or Chinese ‘investor’ looking to flee economic chaos locally, pocket the profit and cut their tax bill in half.
Congress’ Joint Commission on Taxes severely low-balled the amount of capital U.S. firms will repatriate. According to this article by Larry Kudlow (not normally someone I would quote, but here he’s rational), the JCT estimated just $500 billion out of $3 trillion in offshore corporate profits will come home over 3 years.
And then they said 1-2% growth, which, with a tax structure like this, is a low ball. The JCT’s own rate of estimated repatriation ($280 billion in 2018) alone would add more than 1% to GDP as corporate savings is added to Gross National Spending. So, spare me the class-warfare histrionics.
This is mainly how they came to conclude the tax bill would cost us $1.4 trillion over ten years. That’s $140 billion a year. Surely, 1) we can cut spending by that much and 2) we waste ten times that in off-budget wars and subsidies every year.
There’s plenty of room to cover the ‘costs’ of this tax cut.
*The FOMO Trade*
The tax bill itself will make the U.S. more competitive than the sclerotic social welfare states in Europe and Japan. Capital flight into U.S. real estate as a safe-haven play will keep demand up as Americans migrate away from the taxes and Europeans and Asians flee currency devaluation and bursting debt bubbles.
The old tax system was designed to make us competitive with Europe. In other words, normalizing our tax system with theirs while we still pay for their defense, the U.N. and bear the burden of the world’s reserve currency and all the issues of Triffin’s paradox that entails.
In short, the tax code was designed to redistribute America’s wealth around the world in pure Marxist style. Raise our costs instead of forcing them to lower theirs.
*In fact, this tax bill will only accelerate those processes already underway. The Dow is making new highs while the German DAX is struggling.*
That fire under the Dow Jones and the cryptocurrency markets is only just beginning as the middle class is freed from the yoke of Obamacare to begin taking part in the current runaway bull markets.
*This year’s tax refunds will fuel a whole lotta FOMO, folks.*
*A Good Start*
*The tax cut bill moving through Congress now is by no means perfect. *Eliminating income taxes is the ideal. But, that’s not possible so in evaluating it I’m looking for whether it solves the big problem, namely the incentives to push capital out of the U.S.
It does this.
Lowering the corporate tax rate alone is a major win for Trump. Yes, personal tax rates need to go down. Yes, a lot more work needs to be done for small entrepreneurs and the self-employed who are still massively disadvantaged by the code. But, this bill is a major step in the right direction of reversing the flow of real wealth and incentivizing it to stay onshore.
*Don’t let the Michael Moore’s of the world influence you one whit. That man has nine houses and is a multi-millionaire. He’s also a fat, stupid hypocrite and an economic ignoramus. Fix the business environment first. Invite capital back onshore. Get U.S. corporates spending at home.*
Meanwhile Ted Cruz, Rand Paul and the incoming freshman class of MAGA guys can amend this bill to make it even better for the middle class. In Hollywood terms, they can fix this in post-production.
The cuts that Trump has ordered to the cabinet departments will begin having the biggest impact in the second half of his term.
The capital flight I just described will add to the mix, and for a short time, the U.S. will likely see an economic boom it hasn’t seen since the days of Volcker, Stockman and Reagan. And that, my friends, is what the Democrats truly fear, a 2020 election that puts Kamala Harris into the role of Walter Mondale.
*FDR would be proud.* Reported by Zero Hedge 12 hours ago.
↧
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