“[Alex] Brill said that the good news was that the clinical evidence clearly indicated that e-cigarettes were less risky substitutes for conventional cigarettes.
‘Given that a core objective of the European Commission Tobacco Products Directive is to ensure “a high level of health protection for European citizens”, the proper tax to levy on e-cigarettes should be self-evident: none,’ he wrote.”
As cigarette use decreases, it may be tempting to supplement declining tobacco tax revenues with a tax on e-cigarettes — a relatively new, less risky alternative to traditional cigarettes. Following actions by some European nations, the European Commission is now contemplating the proper tax treatment of e-cigarettes and has just finalised a public consultation on the topic. Taxing e-cigarettes would have a negative effect on nascent, but important, public health gains.
Talk last week about President Trump’s tax reform plan had two themes: The plan is too vague, and it is too costly. In other words, we don’t know what it is, but we know what it costs.
Despite Congress and President Trump needing to fill in many blanks, it is possible to analyze the economic effects of the elements that have been announced. And it is worthwhile to compare these effects to both current law and the more detailed House Republican tax plan.
The New York Times, Runner’s World, and a host of other media outlets recently hyped a new study published in Progress in Cardiovascular Diseases on the benefits of running. The study asserts that running, if performed regularly, leads to 3.2 additional years of life.
“Well, the corporate tax is probably the most distortionary and harmful tax in the whole system. It raises about 10 percent of the revenues that are collected come from the corporate tax. As we just heard, it’s the highest in the — one of the highest in the world. It not only hurts businesses and their profits, but it hurts workers, the people who work at those companies.”
With tax reform hopefully next on the GOP’s agenda, it is important for lawmakers to think about its revenue effects in a sensible way: focus on the long-run budget impact, not the 10-year horizon embedded in congressional rules.
“The fundamental idea is that owners of capital are going to put that capital at risk for an investment, and they’re going to be asking the question, “What rate of return am I going to get on that investment after I pay taxes?” They’re not curious what their pre-tax rate of return is. They’re curious about their after-tax rate of return.”
While the UK is generally regarded as having a larger military and is certainly understood to have a larger economy from which to finance its military, its advantage on at least some common sense metrics is modest and its demands greater; the UK has more geopolitical interests around the globe to defend. Spain, on the other hand, while somewhat less equipped would have a proximity advantage in any armed conflict over Gibraltar. In short, the winner from such a hypothetical encounter is far from obvious to a casual observer.
“What are we going to do about health care? Well, it seems at the moment we’re not doing much of anything because the lawmakers in Washington can’t decide the answer to that question. My view is that Republicans have spent a long time talking about what they don’t want in health care. They’ve run for seven years against Obamacare. I think that’s reasonable because there are a lot of flaws in that program. But they’ve spent almost no time clearly defining what it is that they want. And that’s in part why they faulted last Friday and couldn’t get a bill passed out of the House of Representatives.”
Pundits have posited every imaginable reason for the failure of the GOP to get their health care reform bill through the first big hurdle: passage on the House floor. As we all know too well, Speaker Ryan pulled the bill just minutes before a vote was scheduled, when it was absolutely clear that a majority of support could not be reached. But would success have ushered in a new health care paradigm? I doubt it.
“If the tax incentive [for charitable giving] goes away, people will still undoubtedly give to charity, said Alex Brill, research fellow at AEI who published the findings. The AEI model accounts for it. But gifts from wealthy donors could decrease significantly. ‘There’s consensus that the tax break definitely matters. People are always going to quibble about the exact magnitude of the impact,’ Brill said, citing end-of-the-year giving as one example.
“The Trump administration could face some trouble getting its tax reform through by August, [said] Alex Brill…. ‘There’s only so much that Congress can process at the same time. I was very pleased to hear [Treasury Secretary Mnuchin] put an emphasis and a priority on tax reform, an aggressive schedule of a bill signing in August, but we do need to recognize that there’s a whole other conversation in Washington about [Affordable Care Act] repeal, repeal and replace, or repeal and repair that is potentially in conflict,’ simply due to time constraints, Brill said.”
“Tax reform is by definition a game about winners and losers. If there aren’t winners and losers, it’s not tax reform. So there should be no surprise that there are people who are upset about the things that are being discussed, but that doesn’t make it a bad idea…. The idea…is to create a level playing field. There are winners and losers today as a result of the tax code, and if we can clean that system up, we can create fairness between debt and equity, between corporate and non-corporate, between domestically domiciled corporations and foreign competitors.”
If the House Republican plan for a border adjustment tax were adopted, many large U.S. multinationals and others net exporters would receive more tax subsidy on their exports than tax owed on their other business activities. Without refundable credits, a 20% border adjustment tax would actually yield $260 billion in revenue beyond the expected $1 trillion.
MGA’s Alex Brill Contributes to Nonpartisan Report Offering Menu of Options to Policymakers on Social Insurance Programs
In an ambitious new report released today, the National Academy of Social Insurance provides detailed, evidence-based analyses on a range of policy options for modernizing the nation’s social insurance system.
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