Links: The Prospects of Tax Reform and Obamacare’s Cadillac Tax
May 28, 2013
Bruce Bartlett thinks the prospects of tax reform might be improving, but wisely recognizes that it’ll be tough as long as the Obama Administration stays out of the discussion.
A commentary in Forbes points out there may be other factors preventing progress on reform. A common tax reform idea is to eliminate all tax expenditures in order to lower the rate. From a far, there seems to be a lot of support for such simplification, but in practice it’s not so simple: 1) not every tax expenditure is a loophole, and 2) every loophole has a group of backers to defend it.
The Texas legislature used its budget surplus to cut taxes for businesses, as it continues the hunt to make itself attractive to new business. The $1 billion plan includes a rate cut for all businesses and an extension of the franchise tax exemption for small businesses.
Matt Yglesias points out that Obamacare’s “Cadillac tax” is seeing results, as employers are moving away from expensive insurance plans. But this shouldn’t come as a surprised – taxes impact behaviors. In this case, it has led businesses to change their behavior, as companies scale back on high-end insurance programs covered by the tax.
The “Cadillac tax” is designed to help keep overall health costs down, and does so by helping consumers realize the true cost. If this Times article is any indications – it’s working. Employees now have to worry about their increased out of pocket costs for care, and consequently will purchase less care. Not quite the promise of lower premiums that everyone was hoping for.
Relatedly, the recent IRS scandal has many wondering about the role of the IRS in the implantation of Obamacare: CNN Money has an answer.
And after a tough week for the IRS: the IRS granted Oklahoma tornado victims special tax relief that allows them until September to file any payment that was due starting May 18th. If you’re interested, you can help here, or any of the numerous other places around the web.