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The Good, the Bad and… Well, Just the Bad and the Ugly That Could Be in Congress’ Omnibus Spending Bill

Mar 20, 2018 by AFP

This week, Congress is set to vote on a trillion-dollar omnibus spending bill that could potentially include several troubling provisions that AFP has consistently opposed.

Lawmakers should reject any attempt to include such provisions as an Obamacare bailout for health insurance companies, an online sales tax and any tax “extender” carve-outs that would undermine the benefits hard-working Americans are seeing as the result of historic tax reform.

Oppose Obamacare Bailouts for Insurers

Congress needs to keep any Obamacare spending bills out of the omnibus. That includes reinsurance payments and cost-sharing reduction subsidies, which, in truth, amount to nothing more than taxpayer bailouts of insurance companies.

What’s worse, lawmakers are hoping to slip these payments into the omnibus under the guise of a budget gimmick that would hide the multi-billion-dollar price tag of these subsidies.

That’s billions of taxpayer dollars padding the profits insurance companies instead of lowering health care costs for patients by dismantling the structure of Obamacare that’s been driving up costs.

What Congress should do instead: Extend short-term plans that could end up being as little as one-quarter of the cost of current exchange plans. The Administration has submitted a rule to expand short-term plans, but Congress should codify it into law, and better yet, make these short-term plans renewable.

Congress could also repeal Obamacare’s rules and regulations that drive up the cost of insurance.

We need to give patients more affordable options that better meet their needs. Throwing taxpayer money at insurance companies via cost-sharing reduction payments and other bad Obamacare spending bills won’t do that.

Oppose an Online Sales Tax

Americans for Prosperity has signed a coalition letter opposing a proposed online sales tax, describing it as “bad politics, bad policy, and bad precedent.”

Creating an online sales tax defies longstanding practice. Doing so undermines the Supreme Court’s current standard that a seller must have a physical presence in a state before they can be required to collect and remit sales taxes to that state.

It also grossly expands state tax collection authority and subjects Americans to the whims of thousands of out-of-state tax collectors.

An online sales tax also flies in the face of Supreme Court precedent. In 1992, the Court ruled that companies lacking physical presence within a state would not have to collect state sales tax on purchases.

What Congress should do instead: The Supreme Court has already agreed to hear a case on this very issue later this year. If the Court rules in favor of broadening states’ taxing power, Congress can and should act to preserve due process constraints that limit the power of states to tax and regulate beyond their borders.

It makes little sense to stuff an online sales tax into this trillion-dollar spending bill on the heels of tax reform that’s doing so much to benefit American businesses and workers. Why undermine that progress with another burdensome tax, especially when the Supreme Court won’t hear the issue until later this year?

Oppose Corporate Welfare Tax Extenders

Speaking of undermining tax reform, some members of Congress want to use the omnibus to insert billions of dollars in expired corporate welfare provisions back into the tax code.

The recent tax reform bill intentionally eliminated the number of carve-outs for favored industries such as horse racing, motor sports, green energy and rum distilling.

By reviving these tax extenders, lawmakers would be forcing taxpayers to foot the bill, just months after taking this money and putting it back where it belongs: in the pockets of hardworking Americans.

What Congress should do instead: Protect tax reform by opposing special handouts for favored industries and rejecting the revival of these egregious corporate welfare carve-outs