Congressional Republicans plan to use the next four weeks away from Washington making a public case for a sweeping rewrite of the tax code, an ambitious legislative undertaking they hope will heal divisions that opened when the party’s signature health-care bill collapsed. But at home in their districts, they face pressures that could make it hard to focus on taxes.

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Obamacare gave the federal government a heretofore unprecedented power: the power to force us to buy health insurance irrespective of our desire to do so. Republicans, for both moral and economic reasons, oppose this mandate. The framers of the Constitution never envisioned granting Congress the power to force people to buy a privately delivered financial service. There are also important economic reasons to oppose Obamacare’s mandate. Gross premiums for individually purchased coverage have doubled over the past four years under Obamacare. But the authors of Obamacare don’t need to care about whether they’ve made coverage costlier, because they’re forcing you to buy it anyway. Without a mandate, insurers would have to do what businesses have to do in every other sector of the economy: design products that you voluntarily want to buy because they represent a good value for you. Under Obamacare, they don’t have to.

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The new Senate health bill abolishes the following Obamacare taxes: 1) Individual Mandate Tax; 2) Employer Mandate; 3) Medicine Cabinet Tax; 4) Flexible Spending Account Tax; 5) Chronic Care Tax; 6) Health Insurance Tax; 7) Medical Device Tax; 8) Tax on prescription medicine; 9) Tax on Medicare Part D retiree prescription drug coverage; 10) Health Savings Account (HSA) Withdrawal Tax; and 11) 10% excise tax on small businesses with indoor tanning services. The Senate bill also delays the “Cadillac” tax on employer-provided insurance until 2026 and doubles the maximum HSA contribution from $3,400 to $6,550 for individuals and from $6,750 to $13,100 for families. The Senate bill also allows Americans to use HSA funds to pay for health insurance premiums.

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The new Senate bill  1) Reduces the number of people eligible for subsidies, reduces the values of the premium subsidies, and lowers the cap on total subsidy expenditure;  2) Eliminates the individual and employer mandates;  3) Restricts coverage for abortion;  3) Ends the cost-sharing reductions — but not before paying insurers back for the money they’ve already laid out;  4) Gives states a great deal more flexibility in the waiver program;  5) Gets rid of a lot of Obamacare taxes;  6) Provides market stabilization funds;  7) Winds down the Medicaid expansion funding, but not as fast as the House bill; and  8) Converts Medicaid to a per-capita allotment rather than an open-ended entitlement.

The government’s price tag for a single-payer health care system would be astonishing. When Sen. Bernie Sanders (I-VT) proposed a “Medicare for all” health plan in his presidential campaign, the nonpartisan Urban Institute figured that it would raise government spending by $32 trillion over 10 years, requiring a tax increase so huge that even the democratic socialist Mr. Sanders did not propose anything close to it.

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Recall that under Democratic Governor Peter Shumlin Vermont committed to a single-payer for the state but had to abandon the effort in 2015. Why? The cost was staggering — $4.3 billion when Vermont’s entire fiscal 2015 budget, including both state and federal funds, was about $4.9 billion. That’s right: essentially doubling the size of the government.
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One of the biggest problems health care experts in Washington, D.C. make is that they think the whole world is about health care. If a bill addresses the health policy, they think, it’s a good bill. Well, health policy has a lot of spillover today onto tax policy (there are twenty new or higher taxes in Obamacare, employer provided health insurance is the largest single tax break, etc.), employment law policy, family policy, etc. If the Senate GOP is going to “get it right,” they need to consult with those who have seen the way the sausage has been made under existing laws. Nowhere is that more true than in the area of the crucial individual tax credit.

If they do not, those who fail to learn from history might just be condemned to repeat it.

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Senate Republicans reworking Obamacare are considering taxing employer-sponsored health insurance plans, a move that would meet stiff resistance but which would help make the tax preferences for health insurance more equal. The move could raise billions in revenue that could be used to help stabilize the fragile individual insurance market. But it could be politically risky, since it could expand the impact of GOP health proposals from Medicaid recipients and those who buy insurance on their own to the roughly 177 million people who get coverage through their employers.

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Democrats in California’s state Senate spent Thursday hemming and hawing over Senate Bill 562, the Healthy California Act. The legislation would create a single-payer health care system to cover all Golden State residents. This proposal would kneecap California’s economy and saddle millions with the life-threatening wait times, rationed care, and out-of-control costs that plague all single-payer systems. The Healthy California Program would cover all medical expenses without premiums, deductibles, or copays. Such a sweeping overhaul won’t come cheap. An analysis from the state Senate Appropriations Committee puts the cost of the plan as originally proposed at around $400 billion a year.
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The Trump budget assumes Obamacare repeal. On the tax side of this, it particularly assumes repeal of the 3.8% point surtax on capital gains, dividends, and other savings (known as the “net investment income tax,” or NIIT). There are approximately 20 other new or higher taxes in Obamacare that also will be repealed. Tax reform assumes they are gone before starting on a new system.

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