{"id":20438,"date":"2017-11-28T23:12:41","date_gmt":"2017-11-29T06:12:41","guid":{"rendered":"http:\/\/lastbestnews.com\/site\/?p=20438"},"modified":"2017-11-28T23:12:41","modified_gmt":"2017-11-29T06:12:41","slug":"tax-reform-implications-expand","status":"publish","type":"post","link":"https:\/\/montana-mint.com\/lastbestnews\/2017\/11\/tax-reform-implications-expand\/","title":{"rendered":"Tax reform implications expand"},"content":{"rendered":"
\"DC\"<\/a>

David Crisp<\/p><\/div>\n

An alert reader pointed out that last week\u2019s column<\/a> on the tax reform bills now before Congress omitted a key detail.<\/p>\n

Actually, the column omitted a lot of details. That was way too big a topic for a single column to fit in everything about tax reform that could affect Montanans. But the reader made a particularly compelling case, complete with facts and figures that, so far as I could check them, are on target.<\/p>\n

While the column mentioned that Congress is proposing to roughly double the standard deduction, it failed to mention that the legislation also eliminates the personal exemption. That was $4,050 per exemption in 2016, meaning that a couple filing jointly could knock $8,100 off their income, plus $12,600 ($12,700 this year) for the standard deduction, for a total of $20,700.<\/p>\n

That takes much of the punch out of increasing the standard deduction to $24,000, and it\u2019s much worse for, say, a single mom with a handful of exemptions \u2013 I mean, kids.<\/p>\n

The reader said he found it \u201cparticularly galling\u201d that the House version of the bill eliminates the deduction for medical expenses (the Senate version does not, so it isn\u2019t clear how that will play out).<\/p>\n

Before he retired, the reader said, he was able to pay about 25 percent of his health insurance with pre-tax dollars. He funded a health savings account that reduced his income for tax purposes by $3,000.<\/p>\n

\u201cHealth insurance provided through employers works well for some, but is patently unfair for many,\u201d he wrote. \u201cPeople that do not receive it through their employer are subsidizing those that do.\u201d<\/p>\n

That actually sounds like an argument for getting rid of the medical deduction, but the reader\u2019s bottom line makes a powerful case: With deductions for medical expenses, interest, charitable contributions and state taxes, he was able to knock $38,900 off his gross income in 2016. He is one of many Americans likely to see his taxes rise under whatever reform bill passes.<\/p>\n

\"CapreAir_Variable\"<\/a><\/div><\/div>About 8.8 million<\/a> American families took the medical deduction in 2015. Since the deduction kicked in only after expenses exceeded 10 percent of their income, these were mostly people who were really hit hard by medical bills. Now they could be hit even harder.<\/p>\n

Interestingly, U.S. Sen. Steve Daines, R-Mont., was briefly in the news<\/a> this week for suggesting he would oppose the tax bill. Daines isn\u2019t worried about sick Montanans; his concern was that the bill could tax small businesses at a higher rate than major corporations.<\/p>\n

The 45Committee<\/a> even bought TV ads urging Montanans to contact Daines and ask him to vote for whatever bill finally emerges from Congress. What\u2019s the 45Committee?<\/p>\n

The 45Committee was founded by Todd Ricketts<\/a>, whose family owns 95 percent of the Chicago Cubs. President Trump nominated Ricketts as deputy secretary of commerce last year, but Ricketts withdrew, saying that he was unable to untangle his finances enough to satisfy the Office of Government Ethics.<\/p>\n

Ricketts is described by Politico as a \u201cGOP mega-donor,\u201d and the committee is a 501(c)(4), organization, so it does not have to disclose its donors.<\/p>\n

In the last year, it has paid for ads calling for the impeachment of the Internal Revenue Service commissioner and in support of the confirmation of Tom Price as head of Health and Human Services and Jeff Sessions as attorney general. Ads attacking former President Obama and the Clintons also have aired.<\/p>\n

That means Daines is in pretty select company, and Joe Scarborough predicted on his \u201cMorning Joe\u201d show on MSNBC this week that Daines will come around.<\/p>\n

A business group called Reforming America\u2019s Taxes Equitably<\/a>, or RATE, provided an online form to send to Daines asking him to vote for tax reform.<\/p>\n

\u201cOur outdated code can claim responsibility for shipping thousands of companies overseas and lowering workers’ wages by thousands of hard-earned dollars,\u201d the form says. It cites a projection from the president\u2019s Council on Economic Advisors that the tax reform bill would raise wages by $4,000 to $9,000 and hike the Gross Domestic Product 3 percent to 5 percent a year. State Rep. Greg Hertz, R-Polson, used figures almost as optimistic from the Tax Foundation in an opinion piece<\/a> that appeared this week in the Billings Gazette.<\/p>\n

As you might imagine, these figures are highly disputed. The Economist notes<\/a> that the Council on Economic Advisors\u2019 \u201cestimate is more than a little optimistic. There is no clear relationship between recent corporate-tax cuts and wage growth in rich countries.\u201d Liberal economist Paul Krugman<\/a> said it\u2019s a shame that economists even have to take time to deal with the Tax Foundation\u2019s shaky estimates.<\/p>\n

Daines appears to have no problems with the rest of the bill, including repeal of the individual mandate to buy health insurance. That move is estimated to remove insurance from as many as 15 million Americans and hike insurance rates by up to 20 percent.<\/p>\n

Unfortunately, when you click on Daines\u2019 website to read why he opposes the mandate, you get a \u201c404 page not found\u201d<\/a> message. He must have liked the old system: Young, healthy people can skimp on insurance, knowing that if catastrophe strikes, they can pass the cost of their expensive care onto people who do have insurance.<\/p>\n

The only difference will be that the people who have to pay those bills may not be able to deduct the cost anymore.<\/p>\n","protected":false},"excerpt":{"rendered":"

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