for the benefit of selectmen: from the Massachusetts Municipal Association website.
Cadillac Tax:
The fate and composition of federal legislation on health care reform remains unclear, but it appears increasingly likely that the so-called Cadillac tax will come into effect, though not quite as soon as initially planned.
At the beginning of May, the House of Representatives passed the American Health Care Act, which is intended to “repeal and replace” the Affordable Care Act (also known as Obamacare), but would retain many provisions of the ACA. Under the bill, those with preexisting conditions would still be able to get insurance, though states would have more flexibility in determining what conditions insurers would be required to cover. Individuals would still be able to stay on their parents’ health insurance plans until age 26, and there would be no lifetime cap on the amount of care an individual can receive on a given insurance plan.
The House bill would also retain the ACA’s Cadillac tax, which was designed to be the primary funding mechanism for the ACA to pay for some of the more costly policy changes.
The Cadillac tax is a 40 percent annual excise on individual health insurance plans valued above $10,800 and family plans valued above $29,500. The tax was originally due to go into effect in 2018, but the start date was pushed back to 2020. With the arrival of the Trump administration, however, there was uncertainty about the fate of the tax.
Note: 40 percent annual excise, perhaps that led to the confusion with motor vehicle excise tax?
There is also more information on the MIIA website.
“If Massachusetts had a higher tax rate on incomes over $1 million, then owners of S-corps and other pass-through entities with more than a million dollars of individual income (including pass-through profits) would pay the additional 4 percent on the income over one million dollars a year. Those with less than a million dollars a year in taxable income would not be affected. Nationally, over 98 percent of those reporting pass-through income have taxable income under a million dollars a year.10
ReplyDeletePresident Trump has proposed to cut taxes for pass-through income below the tax rate on other forms of income. The President has proposed a top rate of 15 percent on this income, rather than the top rate for other forms of income (up to 39.6 percent). This tax break would cost the United States $1.5 trillion over ten years and the significant majority of the benefits would go to the highest-income one percent of the population.” - massbudget.org - progressive taxation Hope to see this in the ballot Nov 2018
Before, it was 100% deductible on federal income taxes. The beautiful people don't mind diverting what is their "fair share" of federal taxes to state taxes. But they'll vote with their feet once this state jacks up their taxes and the actually have to pay more!
ReplyDeleteI’ve heard that argument since 1980 and it has not been realized. I have not witnessed any great migration to Alabama.
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