Welcome to the IMA Tax Policy Blog. The blog format reflects our efforts to provide IMA members with timely, relevant and thought provoking information in a form that is accessible for easy reference. IMA’s Tax Policy Blog will be updated on a regular basis. Weekly news update emails will be sent out to notify subscribers of new information posted on the blog. IMA members are welcome to submit material for the blog, or request specific information. Simply email Editor Stefany Henson at shenson@ima-net.org with your information or request. Editorial submissions are subject to review. 

Wednesday
Apr292015

Nearly Half of U.S. Employers Expected to Hit the Health Care “Cadillac” Tax in 2018 with 82% Triggering the Tax by 2023

Companies may not be aware of all factors determining tax

Despite continuing efforts to rein in rising health care costs, roughly half of large U.S. employers will begin to hit the excise tax in 2018 and the percentage is expected to rise significantly in subsequent years, according to an analysis of large employer health care programs conducted by global professional services company Towers Watson. Further, the size of the tax burden is expected to be substantial as the Congressional Budget Office (CBO) estimates the total liability for companies subject to the tax could be a cumulative $79 billion between 2018 and 2023.

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Thursday
Apr232015

State and Local Sales Tax Data for 2015

How does your state compare to its neighbors?

The nonpartisan Tax Foundation recently released an updated report of sales taxes throughout the states in 2015. Using a population-weighted average of local sales taxes, the report details the combined state and local sales tax rates for each state and explains how sales taxes fit into a state’s overall tax structure.

The key findings include:

45 states collect statewide sales taxes.

38 states collect local sales taxes.

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Thursday
Apr232015

Tax Complexity Is Expensive for Small Businesses

By Andrew Lundeen, The Tax Foundation

Taxes are time consuming and expensive for small businesses in the United States.

Nearly a quarter of small business owners in the United States spend over 120 hours each year dealing with their federal taxes, according to the most recent survey by the National Small Business Association. That’s three work weeks spent dealing with federal taxes. Additionally, over half of small business owners spend more than one work week (40 hours) on federal taxes each year, according to the most recent survey by the National Small Business Association.

According to the survey, these taxes come with a heavy cost as well, with over a quarter of businesses spending more than $10,000 each year on simply the administration of federal taxes. This does not include the actual tax burden, which 42 percent of respondents said creates the largest burden on their business.

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Wednesday
Apr152015

Tax Freedom Day® 2015 Arrives in Illinois on April 30

43rd state to reach Tax Freedom Day, 6 days earlier than national average Washington, DC

Illinois’s Tax Freedom Day, the day when taxpayers in the state have collectively earned enough money to pay their federal, state, and local tax bill for the year, will arrive on April 30. This makes it the 43rd state to reach Tax Freedom Day in 2015. According to the annual report by the nonpartisan Tax Foundation, national Tax Freedom Day falls on April 24, 114 days into the year and nine days after the tax filing deadline. Each state’s total federal, state, and local tax burden varies greatly. Tax Freedom Day arrives earliest in Louisiana on April 2 and Mississippi on April 4. Connecticut and New Jersey will be the last to reach Tax Freedom Day this year on May 13. “Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels,” said Tax Foundation Economist Kyle Pomerleau. “Arguments can be made for if and why the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand cost of government. Tax Freedom Day helps people relate to that cost.” The study’s key findings include:

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Wednesday
Apr152015

The Internal Revenue Service meets the Affordable Care Act

By: Elaine Kamarck, Brookings

As tax day is on April 15, 2015, the Internal Revenue Service (IRS), the government agency Americans love to hate, will be implementing the mandate in the Affordable Care Act (ACA) for the first time ever. This is a law that a large part of the public, mostly conservative, loves to hate as well. Regardless of the reality of how things go, the combination of the IRS and the ACA guarantees complaints from politicians and the public alike. Whether these complaints represent a significant critique or are simply growing pains that will fade away, they will have repercussions for the 2016 elections and beyond.

Ever since its passage, the mandate that every American have health insurance has been at the heart of the controversy over the ACA. It is enforced through the tax code, which is enforced by the IRS. Beginning this year, citizens will find some new boxes to check and some new forms to fill out as they complete their tax returns.

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