Nov 17, 2017

How the individual mandate scrambles the Senate tax cuts

Caitlin Owens, author of Vitals

The Senate Finance Committee's markup of the tax bill yesterday fixated on new tables from the Joint Committee on Taxation showing that, even before the lower individual rates expire, people with lower incomes would pay higher taxes.

Expand chart
Data: The Joint Committee on Taxation; Note: Nov. 9 proposal didn't include a repeal of the individual mandate or sunsets of the individual rates. Nov. 14 proposal included both. Chart: Andrew Witherspoon / Axios

The bottom line: Economists say this is mostly because the revised bill repeals the Affordable Care Act's individual mandate — so some people wouldn't buy health coverage, and therefore wouldn't get the tax credits to subsidize it.

Be smart: What this table is showing is lower-income people's taxes going up, in JCT's calculations, because some of them are no longer receiving the ACA premium subsidies. "This is all negative taxes disappearing. It's not like they have to write a check to the government in any way," said Doug Holtz-Eakin, president of the American Action Forum.

Go deeper: While there are other serious policy questions regarding repealing the mandate, Republicans do have a point when they say these people are choosing to give up their health coverage.

  • People receiving premium subsidies — generally people earning around $12,000–$50,000 a year — would be largely insulated from premium hikes following the mandate repeal, and therefore would be unlikely to drop coverage over affordability concerns.
  • "For people currently receiving premium tax credits, it really would be within their control whether to continue getting insured or not," said Larry Levitt of the Kaiser Family Foundation.
  • The biggest exception is if insurers pull out of markets, citing instability, and leave counties without any exchange plans.

Another big thing the tables show are higher rates in 2027. That's because the individual and small business tax cuts expire beginning in 2026, so unless Congress extends them, people will see a big tax hike when the lower rates sunset.

Sign up for Axios newsletters to get our smart brevity delivered to your inbox every morning.

Go deeper

Updated 17 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 9 a.m. ET: 6,766,997 — Total deaths: 395,459 — Total recoveries — 2,767,337Map.
  2. U.S.: Total confirmed cases as of 9 a.m. ET: 1,897,838 — Total deaths: 109,143 — Total recoveries: 491,706 — Total tested: 19,231,444Map.
  3. Public health: WHCA president says White House violated social-distancing guidelines to make reporters "a prop" — Jailing practices contribute to spread.
  4. Sports: How coronavirus could reshuffle the sports calendar.
  5. Jobs: Better-than-expected jobs report boosts stock market.

Trump's week of viral quicksand

Data: NewsWhip; Chart: Andrew Witherspoon/Axios

Stories about President Trump's photo op at St. John's church after peaceful protesters were forcefully cleared from the area averaged the most online attention of any issue about the president this week.

Why it matters: Trump's force-over-compassion approach to the demonstrators protesting the murder of George Floyd had Republican allies backpedaling to keep a distance — and led to a wave of condemnations that got plenty of online traction on their own.

Biden formally secures Democratic presidential nomination

Joe Biden speaks at Delaware State University's student cente on June 5. Photo: Jim Watson/AFP via Getty Images

Former Vice President Joe Biden became the formal Democratic presidential nominee on Friday evening, per AP.

The big picture: Biden has been the presumptive frontrunner to take on President Trump since Sen. Bernie Sanders suspended his campaign in early April.