WASHINGTON UPDATE COHFA'S NON-PROFIT HEATHCARE EDUCATIONAL FORUM JUNE 21, 2016 Charles A. Samuels, Mintz Levin, NAHEFFA General Counsel Email: casamuels@mintz.com and Michael Rock, American Hospital Association Email: mrock@aha.org
Campaign 2016
Negatives Abound Historic Lows for Both Candidates Source: Wall Street Journal/NBC News Poll. May 19, 2016
Doing the Electoral Math Trump Would Need to Pick off States that Lean Blue Source: Larry Sabato. University of Virginia Center for Politics. May 7, 2015.
7 Republicans Running in States Obama Carried Senate Races by 2012 Presidential Performance (Obama vs. Romney) Obama + 15 or Greater Obama +5 to +14.9 Obama +4.9 to Romney +4.9 Romney +5 to +14.9 Romney +15 or Greater DEMOCRATS (10) Boxer (CA) +23 Blumenthal (CT) +17 Schatz (HI) +43 Mikulski (MD) +26 Schumer (NY) +28 Leahy (VT) +36 Murray (WA) +15 Wyden (OR) +5 Bennet (CO) +5 Reid (NV) +7 REPUBLICANS (24) Kirk (IL) +17 Grassley (IA) +6 Ayotte (NH) +6 Toomey (PA) +5 Johnson (WI) +7 Rubio (FL) D+1 Burr (NC) R+2 Portman (OH) D+3 Murkowski (AK) +9 McCain (AZ) +9 Isakson (GA) +8 Coats (IN) +10 Blunt (MO) +10 Scott (SC) +10 Shelby (AL) +22 Boozman (AR) +24 Crapo (ID) +32 Moran (KS) +22 Paul (KY) +23 Vitter (LA) +17 Hoeven (ND) +20 Lankford (OK) +34 Thune (SD) +18 Lee (UT) +48 Source: The Cook Political Report. National Journal. April 1.
2016 Candidate Tax Proposals
The Presidential Campaign Don't trust anyone who tells you they understand Donald Trump's tax policy or how his administration will operate. But..
Why Care? Campaign tax proposals are just that for the campaign Major tax reform may not happen even if one party holds all the levers in DC But, the proposals do tell you what ideas are current and generally accepted - where things may be heading Revenue raising provisions can be used to offset costs outside of comprehensive tax reform
The Proposals in General In general (Surprise!): Republicans cut taxes dramatically, mostly for upper income but everyone gets something Democrats raise taxes, mostly on upper income, to pay for additional spending Deficits not part of discussion
What Could Affect Bonds? First, whether the exemption is maintained, restricted or eliminated Economic benefit of exemption depends on differential between taxes on other investments and muni bonds So also: Treatment of non-muni interest Treatment of alternative investments (capital gains, dividends) Overall rate structure a maximum rate of 28% with a full muni exemption is economically pretty much the same as proposal to limit benefit of exemption to 28%
Donald Trump 3 brackets 10%, 20%, 25% Deductions and exclusions most likely including muni interest -limited to 10% bracket (i.e., max 15% rate on munis) Charitable contributions and mortgage interest not limited Top business rate 15% Capital gains and dividends 20% Cuts revenue by $9.5 trillion over next decade
Top rate 43.6% Hillary Clinton Proposals very much like Obama proposals Caps value of preferences, except charitable contributions, at 28% - including tax-exempt interest Reinstate and expand Build America Bonds, establish infrastructure bank Dividends and capital gains taxed at max 23.8%, but lengthen holding period for capital gains Regular interest taxed as ordinary income Increases revenue by $1.1 trillion over 10 years
Meanwhile, Back in Washington House Republican Tax plans House Municipal Finance Caucus
On the Regulatory Side Bank Loans MSRB, MA role? o Voluntary Best Practices HQLA MMF NAV Issue IRS Rules on Accountable Care Organizations
What s Possible. Hospital Bill Changes to the 340B Drug Pricing Program Action on Cybersecurity Behavioral Health Reform SMARTER Act Post-acute Care Flexibility
What s Probable. Action to Address the Opioid Epidemic Legislation to Spur Medical Innovation Ruling on Health Insurer Consolidation Appropriations Zika Funding
What s Inevitable. Inpatient PPS Rule Outpatient PPS Site-neutral Cut Implementation MACRA Implementation Medicaid Managed Care Changes Medicare Hospital Star Ratings