Ground Report

Donald Trump acts like he is a straight talker, but like any other politician – he is short on details, long on emotion. During the past week, as Paul Ryan has been selling the repeal of the Patient Protection and Affordable Care Act, little or no mention has been made of the repeal of two taxes that affect the rich: (1) the Net Investment Income tax and (2) Total Additional Medicare Tax. These two taxes together cost wealthy American taxpayers earning more than $250,000 $26,756,540,000 in 2015.

https://www.irs.gov/uac/soi-tax-stats-individual-income-tax-returns

Scroll below the fold, Preliminary Data, Table 1, Rows 293- 298. These data were hard to find. They used to be available through the White House web site but the link has been removed.

These taxes pay for the Premium Recovery Credits provided to poor Americans under the ACA. There is no provision in the Repeal Act to replacement these taxes with other revenue sources to pay for the new Healthcare Tax Credit.

One unintended consequence of these tax cuts will be a freeze in the M&A market or any other transaction that produces a capital gain in the second half of 2017. The tax cuts are effective in 2018.