Defending the Higher Deduction for the Joint Federal/State Healthcare Program: The Case for a $3000 Cap on State and Local Taxes
The joint federal/ state healthcare program covers 72 million low-income, elderly and disabled people in the United States. The House Energy and Commerce Committee, which oversees the program, released their planned changes late Sunday and have zeroed in on a handful of reforms that are broadly supported among both conservative and moderate GOP lawmakers.
As part of the bill, Rep. Nick LaLota has been an advocate for a higher deduction. Last week he told reporters that there were still discussions going on, but that he thought the Republicans would reach a deal. The issue is a red line for him and at least four other colleagues. And with Republicans clinging to a razor-thin majority in the House, their opposition could sink the bill.
The fight over SALT is expected to be a major sticking point when the Ways and Means committee begins its markup of the bill on Tuesday. The committee wanted to lift the cap on SALT to $30,000. There is a group of Republican lawmakers in states with high local property taxes pushing for a higher cap. They insist the bill must have a provision that’s more than $30,000.
The 2017 tax bill capped the amount that taxpayers in several (mostly blue states) can deduct for state and local taxes at $10,000 per year. During his 2024 reelection campaign, Trump vowed to get rid of the cap, but doing so would add significant costs to the GOP package and most Senate Republicans don’t support scrapping the cap.
The “Monetary Account for Growth and Advancement” is a Tax-Exempt Trust for the United Ways and Means
The “money account for growth and advancement” is a trust that would be established with the plan released by the Ways and Means committee. Based on the text of the bill, it appears to be a tax-exempt trust created by the federal government for younger Americans. Up to $5,000 can go into the accounts each year to help pay for higher education, a small business, and their first home. The beneficiary will turn 31 when it ends.
One potential revenue source that’s absent from the plan are any new income taxes on high earners. The president wanted to increase the tax rate for people earning more than $5 million, from 37% to 39.6%. He said on social media that although he supports the “TINY” change, it would be used as a campaign issue against Republicans. “Republicans should probably not do it, but I’m OK if they do!!!” Trump said something.
The Republicans want to make the Trump tax cuts permanent. In their full plan released Monday, the House Committee on Ways and Means added new tax breaks that the president campaigned on in 2024 — including no taxes on tips or overtime pay. If Republicans can’t hit the spending cuts they need to, they will have to scale back their ambitions.
It’s not clear how proposed changes will be received by a divided House GOP that needs unity to pass a spending bill. The Congressional Budget Office estimated the proposed changes to Medicaid and other changes as savings of at least $715 billion. According to the CBO, at least 8.6 million people will lose their health insurance in the next 10 years because of these changes.
They will requireable-bodied adults who receive benefits to report at least 80 hours a month of work. Changes were made to the enrollment process and restrictions were placed on states’ ability to raise taxes on healthcare providers, a practice which attracts more federal matching dollars. The bill also references an overarching goal of eliminating “waste, fraud and abuse” within the program.
Source: Republicans face a crucial stretch this week as they aim to deliver on Trump’s agenda
The Challenge of Dealing With Them: Highlights of the House and Senate ‘Bangs on 2017’s Small Tax Cuts and Implications for Children and Families
That time frame will be put to the test as Republicans try to resolve the most contentious and wide-reaching policies in the coming days. Here is a brief look at some of the key sticking points.
By the end of this month, House Republicans hope to finalize the details of President Trump’s “big beautiful bill” that includes sweeping changes to tax, immigration and energy policy. House Speaker Mike Johnson, R-La., has already muscled a budget blueprint for the plan through the chamber. The task this week is much more difficult, as several House committees are putting pen to paper on policies that will effect pocketbooks and healthcare of many Americans.
Johnson is balancing demands between two competing camps inside his conference. Swing district Republicans are concerned that dramatic cuts to safety net programs and popular tax incentives could endanger their reelection prospects. More conservative members are arguing voters put a GOP trifecta in place to slash the deficit and restructure government programs.
The fiscal equation Republicans are trying to solve is how to reach the $1.5 trillion in spending cuts called for in their blueprint to offset the cost of extending President Trump’s 2017 tax cuts. There is a lot of Republicans that believe the real target is $2 trillion in savings.
Last week, Texas Republican Chip Roy told reporters there were some issues that needed to be resolved. Johnson wants to get the bill through the House and to the Senate by Memorial Day, with the goal of having it to President Trump for his signature by July 4.
But the real deadline for Republicans is mid-July. Scott Bessent says that Congress needs to increase the country’s borrowing authority. The Republicans plan to raise the debt ceiling for five years.
The uncertainty of Mr. Trump’s tariffs will make those incentives less meaningful for companies who are already caught up in that uncertainty. The Tax Foundation said this week that the bill would increase gross domestic product by a small 0.6 percent, a fraction of the 1.7 percent growth the group attributed to the original law.
And that modest growth would come at a cost. The tax bill includes new limits on qualifying for the child tax credit, including that a child whose parent lacks a Social Security number cannot receive the benefit. The credit is currently used by parents without Social Security numbers who have kids that are not citizens, and those parents can claim the money as long as they are a citizen. Tightening the rules would mean two million American children would lose the benefit under the House bill, the chief of staff of the Joint Committee on Taxation told lawmakers on Tuesday.
What is the simplest way to get a loaf of bread for free? Comment on Beyer’s postmodern remarks on the rich, by Beyer
Donald S. Beyer Jr., a Virginia Democrat, claimed that the wealthy are getting a loaf of bread for free.