If you haven’t been oversaturated with the discussions on development of Alaska’s oil resources and the taxing of that resource, then you have a splendid opportunity to learn more from both sides of the argument. Is Alaska’s tax structure on oil too progressive and thus limiting production from old wells? Does the ACES tax structure encourage mostly development from newly discovered wells? There are many questions and it is very difficult to determine where the truth lies.

If the ACES tax is modified, as suggested in HB 110, will the petroleum companies be encouraged to produce and develop more of Alaska’s oil resources? Or will they just take the money and run? One almost needs a ouija board to decipher the discussion. By the way, the State gets 90% of its operating budget funding from oil revenue. What would Alaska do if this revenue stream disappeared? Every person in the state, man, woman and child, would have to ante up more than $14,000 annually to pay for the state’s current spending levels.

The Anchorage Tea Party is hosting “The Future of ACES” on Thursday, January 12 at 6:30pm. The event will be held at 3801 Centerpoint Drive, 1st floor. Talk show host Glen Biegel will moderate the panel which will consist of Senator Bill Wielechowski, Senator Cathy Giessel and Rebecca Logan (AK Industry Support Alliance). So, both sides of the issue will be heard. Following the discussion, there will be a Q&A and an ACES straw poll.

So, bring your ouija boards and help untie this Gordian Knot!

We have heard much about Alaska’s film tax credit incentive and whether or not it benefits the State as a whole or only special interests. Forty states offered similar tax credits in 2010. Many of these states have now abandoned these credits because they do not create the promised jobs for their citizens.  The glamour and Hollywood hype are there but are the financial benefits? The Legislature needs to closely audit the investment and the returns for our economy before it reauthorizes the film tax credit. The Tax Foundation’s Joseph Henchman has reviewed the status of these credits and reports that many states have abandoned them.(read more...)

Requires all employers to include on W-2s the aggregate cost of employer-sponsored health benefits for informational purposes only. If employee receives health insurance coverage under multiple plans, the employer must disclose the aggregate value of all such health coverage, but exclude all contributions to HSAs and Archer MSAs and salary reduction contributions to FSAs.

Source: Kaiser Family Foundation

Excise Tax on High-Cost Insurance Plans—Tax Years Beginning 2018 or Later. Insurers will face a 40 percent excise tax on health coverage with premiums in excess of $10,200 for an individual or $27,500 for family coverage. These thresholds are increased to $11,850 for individuals or $30,950 for families in the case of retirees over age 55, electrical or telecommunications repairmen, law enforcement or fire protection workers, out-of-hospital emergency medical providers, and those engaged in the construction, mining, agriculture, forestry, and fishing industries. Thresholds are subject to adjustment for an unexpected increase in medical costs prior to the effective date, and will be indexed for inflation by the consumer price index plus 1 percent, with additional adjustment based on age and gender profiles of covered employees. The tax is levied at the insurer level, with employers aggregating and reporting information for insurers indicating the amount subject to the excise tax. This will yield an estimated $12.2 billion in 2018 and $32 billion total over 2018–2019.

Source: The Common Wealth Fund

Conformed Definition of Medical Expenses—Tax Years Beginning 2011 or Later. In 2011, the definition of medical expenses for the itemized medical expenses deduction will be extended to apply to health savings accounts, Archer Medical Savings Accounts (MSAs), health flexible spending arrangements, and health reimbursement arrangements. An exception to this rule is included so amounts paid for over-the-counter medicine prescribed by a physician qualify as a medical expense. This will restrict the field of previously qualifying services and expenses and will raise $400 million in 2011 and $5 billion over 2011–2019.

Source: The Common Wealth Fund

Impose an excise tax on insurers of employer-sponsored health plans with aggregate values that exceed $10,200 for individual coverage and $27,500 for family coverage. (Effective January 1, 2018)

Source: Kaiser Family Foundation

New excise tax on medical device manufacturers equal to 2.3 percent of the price for which the medical device is sold. The tax will not apply to eyeglasses, contact lenses, hearing aids, and any other device deemed by the Secretary of DHHS to be of the type available for regular retail purposes.

Source: NAHU

Beginning in 2013, additional 0.9 percentage Medicare Hospital Insurance tax (HI tax) on self-employed individuals and employees with respect to earnings and wages received during the year above $200,000 for individuals and above $250,000 for joint filers (not indexed). Does not change employer HI tax obligations. Self-employed individuals are not permitted to deduct any portion of the additional tax. In addition, there will be a new 3.8% Medicare contribution tax on certain unearned income from individuals with AGI over $200,000 ($250,000 for joint filers).

Source: NAHU

The threshold for the itemized deduction for unreimbursed medical expenses would be increased from 7.5% of AGI to 10% of AGI for regular tax purposes. The increase would be waived for individuals age 65 and older for tax years 2013 through 2016 (Effective January 1, 2013).

Source: NAHU

Expands obligation of persons engaged in a trade or business to report on payments of other fixed and determinable income or compensation. Extends reporting to include payments made to corporations other than corporations exempt from income tax under section 501(a). Also expands the kinds of payments subject to reporting to include reporting of the amount of gross proceeds paid in consideration for property or services.

Source: NAHU