Monday, March 13, 2017

CBO Did Not Analyze (Dynamically Score) Macroeconomic Effects Of Repeal Of Obamacare, Including Unrelated Taxes, And Passage Of American Health Care Act: Removal Of Unrelated Taxes Likely Has a Positive Macroeconomic Effect.

From CBO, "American Health Care Act," March 13, 2017, Cost Estimate:
Macroeconomic Effects
Because of the magnitude of its budgetary effects, this legislation is "major legislation," as defined in the rules of the House of Representatives.1 Hence, it triggers the requirement that the cost estimate, to the greatest extent practicable, include the budgetary impact of its macroeconomic effects. However, because of the very short time available to prepare this cost estimate, quantifying and incorporating those macroeconomic effects have not been practicable. [Footnote omitted.]
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Other parts of the legislation would repeal or delay many of the changes the ACA made to the Internal Revenue Code that were not directly related to the law’s insurance coverage provisions. Those with the largest budgetary effects include:
  • Repealing the surtax on certain high-income taxpayers’ net investment income;
  • Repealing the increase in the Hospital Insurance payroll tax rate for certain
    high-income taxpayers;
  • Repealing the annual fee on health insurance providers; and
  • Delaying when the excise tax imposed on some health insurance plans with high premiums would go into effect.
Removal and delay of the above-listed taxes likely would increase net business investment, employee hours worked and labor-force participation. Each of which, separately and together, would have a positive macroeconomic effect on the US economy and employment.

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