Tax reform and the Cadillac tax were focal points during the Council of Insurance Agents and Brokers legislative summit program Wednesday at the Dirksen Senate Office Building in Washington, D.C.
Tax reform would help the economy, said Sen. Jon Tester (D-Montana), however, the amount of money being spent on campaigns these days and special interest groups can undermine that effort. Unfortunately, this is an uphill battle, he said.
Tester wants to start tax reform from a clean slate and a bipartisan effort is needed. Were all in this economy together, he said.
Reducing the corporate tax rate is essential, said Rep. Jim Renacci (R-Ohio). We have to be able to reduce that rate so we can compete, he said.
Business owners need certainty and predictability when it comes to budgeting, Renacci said. We all plan more than one year out, he said, and in many cases, up to 10 years out. Unfortunately, the governments planning spans less than a year, Renacci said.
That problem needs to be addressed with the Cadillac tax looming, he said. Set to take effect in 2018, employers would have to pay a 40% tax on high-end plans those exceeding $27,500 for a family or $10,200 for an individual.
Premiums have jumped at an unexpected level due to the Affordable Care Act, Renacci said. He said that close to 40% of businesses will be subject to the tax when it goes into effect and 80% will be paying a Cadillac tax by 2023. Its going to affect everybody, he said.
Increasing thresholds could be one solution, said Renacci, a member of the House Committee on Ways and Means, but work has just started on the issue. The ACA is a top concern for his constituents, he said. Other than the terrorist threat, its the No. 1 issue back in my district.
Tester also lauded the re-establishment of the National Association of Registered Agents and Brokers (NARAB II), legislation that aims to ease the ability of brokers to sell insurance in states across the U.S. The legislation was attached to a bill renewing the Terrorism Risk Insurance Act (TRIA) through Dec. 31, 2020. Having one license to sell across the entire country is much more efficient, Tester said.
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