By diverting general funds to roadway spending, the burden of paying for the roads falls on all taxpayers, including people who drive very little or may not drive at all. By relying on other revenue sources to fund roads, states effectively underprice road use. This can manifest in several forms, most notably traffic congestion, but can also distort the transportation market by subsidizing road use relative to alternatives, particularly freight rail. Federal, state, and local governments raise revenues for road infrastructure and maintenance through a combination of taxes on motor fuel, fees on vehicles like registration or licensure, and direct levies on drivers like tolls. This system constitutes a relatively well-designed user feeA user fee is a charge imposed by the government for the primary purpose of covering the cost of providing a service, directly raising funds from the people who benefit from the particular public good or service being provided.
Provider taxes fall on a wide range of provider types but are most common for institutional providers including nursing facilities (46 states), hospitals (45 states), and intermediate care facilities for people with intellectual or developmental disabilities (32 states, Figure 3). Hospitals’ base fee-for-service rates vary considerably across states and, on average, are below hospitals’ costs of providing services to Medicaid enrollees and below Medicare payment rates for comparable services, causing some states to rely more heavily on supplemental payments than others to help cover hospitals’ costs. It is unknown from available data how much states are paying hospitals after accounting for base payments, supplemental payments, and the costs of provider taxes (e.g., the net payment rate), which is one reason why the Medicaid and CHIP Payment and Access Commission has called for greater transparency around provider taxes. To meet House budget resolution requirements, Congress will need to make major cuts to federal spending on Medicaid. An option under consideration is to limit the use of state taxes on providers, which could save hundreds of billions of dollars according to the Congressional Budget Office (CBO). Medicaid is jointly financed by the federal government and the states, with the federal government paying close to 70% of total costs in fiscal year (FY) 2023.
House Bill 2396
Unlike an obituary, Memoriam submissions are remembrances of a loved one who has passed. In a post on his Truth Social platform, Trump said “The Senate Budget plan gives us the tools that we need to get our shared priorities done, including certain PERMANENT Tax Cuts, Spending Cuts, Energy, Historic Investments in Defense, Border, and much more.” “It is now time for the Senate to move forward with this budget resolution in order to further advance our shared Republican agenda in Congress,” Thune, R-S.D., said in a statement, NBC News reported. He is fully on board with the Senate’s proposal and process to cut spending,” Graham said in a statement. “It is now time for the Senate to move forward with this budget resolution in order to further advance our shared Republican agenda in Congress,” Senate Majority Leader John Thune, R-S.D., said in a statement Wednesday.
- When a child attends a public school, it’s possible to think of this as “income” to the household.
- Trump endorsed the Senate’s plan and pushed the GOP lawmakers in attendance to pass the bill.
- Provider taxes fall on a wide range of provider types but are most common for institutional providers including nursing facilities (46 states), hospitals (45 states), and intermediate care facilities for people with intellectual or developmental disabilities (32 states, Figure 3).
- And second, it neglects the role of factor apportionmentApportionment is the determination of the percentage of a business’ profits subject to a given jurisdiction’s corporate income or other business taxes.
Medium stringency TELs, on the other hand, “significantly impact revenue volatility for all measures.” States with these TELs include Connecticut, Montana, and Washington. The extent to which they do so depends on factors such as the minimum number of votes needed to override the TEL. Senate Majority Leader John Thune, R-S.D., opened the chamber Thursday saying they were expected to begin “as soon as today” embarking on what they hope will become the GOP’s signature domestic policy package.
It is no longer the case that customs checks occur when you come over the border into the Czech Republic because the country is a part of the European Union. However, when you arrive on an international flight, you might be met by customs officers. You can bring in goods with a value of up to €300 (excluding tobacco and alcohol) and not pay duty on these, although the limit rises to €430 if you arrive by air. In the unlikely situation of needing to bring more than €10,000 in cash into the country, you will need to notify the customs authority before you arrive in the country.
Recreational Marijuana Taxes by State, 2025
- He is fully on board with the Senate’s proposal and process to cut spending,” Graham said in a statement.
- WASHINGTON — After a long wait, the Senate is launching action on President Donald Trump’s “big, beautiful bill” of tax breaks and spending cuts at a risky moment for the U.S. and global economy.
- A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates..
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All states except for Alaska use provider taxes to help finance the state share of Medicaid spending.
They plan to approve the budget blueprint soon so that committees can start working on a major bill to support Trump’s policies, including tax cuts and immigration funding. By using the “reconciliation” process, Republicans can pass the budget with a simple majority, avoiding the usual 60-vote requirement in the Senate. Although states can influence the year-to-year growth rates of revenue through policy changes, the underlying volatility of each tax stream is often shaped by a variety of other factors beyond policymakers’ control.
In assessing whether provider taxes comply with federal laws, current regulations specify that the hold harmless requirement does not apply when the tax revenues comprise 6% or less of net patient revenues from treating patients (see 42 CFR Section 433.68), a level sometimes referred to as a “safe harbor” limit. States may also receive waivers of the requirement that taxes be broad-based and uniform if the state can prove the net effect of the tax is “generally redistributive,” and that the amount of tax is not directly related to Medicaid payments. From an economic standpoint, new limits on corporate SALT would increase marginal tax rates on corporate investment, reducing long-run output.
Trump Tariffs: The Economic Impact of the Trump Trade War
Because provider taxes often support Medicaid payment rates, there will almost undoubtedly be downward pressure on payment rates if provider taxes are restricted, particularly for institutional providers including nursing facilities, intermediate care facilities, and hospitals. Unlike the individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S., the corporate income tax is intended as a tax on profits. At the state level, this is even memorialized in the name of state tax and expenditure limits some such taxes, as the corporate net income tax or the corporate profits tax. Applying to net income distinguishes the corporate tax from an economically harmful gross receipts taxGross receipts taxes are applied to a company’s gross sales, without deductions for a firm’s business expenses, like compensation, costs of goods sold, and overhead costs.
Road Taxes and Funding by State, 2025
TELs have the same general structure, regardless of whether they limit the growth of taxes or expenditures. But their components vary, and those differences affect the extent to which they restrain tax or expenditure increases. Most TELs limit the annual growth in taxes or expenditures to changes in an economic or demographic growth factor and specify rules for overriding the limit. Table 1 outlines TELs’ components and identifies the components that determine their restrictiveness.
An ideal solution would be to amend the Truth in Taxation law so the Truth in Taxation limit matches the limit proposed under S.B. The public hearing would provide a valuable forum for public discourse regarding the proposal, giving local officials the opportunity to make the case for their proposed increase and get a sense from taxpayers about how they plan to vote in the election at which the matter will be decided. Continued direct notice to taxpayers would also help voters make a well-informed decision on the ballot when they see how much or little their property tax bill would increase under the proposal. As currently drafted, the bill does not propose changes to Kansas’ Truth in Taxation law, but if a well-structured levy limit were adopted, the Truth in Taxation law could be modified so the two policies work hand in hand. Currently, the Truth in Taxation process requires public notice and a public hearing prior to a local taxing jurisdiction’s adoption of any proposed increase in property tax collections beyond the prior year’s nominal amount, with no allowance for inflation or new construction.
A better long-term fix would be to shift funding from increasingly inappropriate proxies for road use to a direct user fee on each mile driven, a vehicle miles traveled tax (VMT). Most states and the federal Department of Transportation have begun exploring replacing the existing funding structure with a simpler VMT tax that better aligns use with costs and better approximates the real price of roads. While states may find it difficult to shift to such a system without the federal government as first mover, state policymakers might nonetheless want to push—and prepare—for such a system. With all but three states unable fund their roadways using existing user fees, road funding is in dire need of a better system. Going further and disallowing corporate property tax payment deductibility would reduce GDP and American incomes by 0.6 percent and reduce hours worked by 147,000 full-time equivalent jobs.
T.E.L. It Like It Is: Do State Tax and Expenditure Limits Actually Limit Spending?
Whereas a personal SALT deduction is a tax preference, the corporate SALT deduction is innate to structure of a tax on net income. Overall, state tax revenue had a volatility score of 7.4 for the 15 years ending in fiscal 2023—ranging from 4.0 in Arkansas to 56.2 in Alaska. The results mean that, from fiscal 2009 to 2023, the growth rate of total tax revenue across the states typically fluctuated 7.4 percentage points above or below its average.
There are 10 states with at least one provider tax that is between 3.5% and 5.5% of net patient revenues. One state (Georgia) reports that all provider taxes are below 3.5% of net patient revenues. One argument against SALT deductions in general, which has sometimes been extended to C-SALT, is that state taxes fund state services, and the benefit of the services is not itself taxed as income. Consequently, the logic goes, if the federal government provides a deduction for state and local taxes, it is implicitly preferencing government-provided services (untaxed) over other forms of income (taxed). The revenue and economic effects of limiting C-SALT deductions are just one aspect of the story.
At both the federal and state levels, these crude patches in roadway funding holes can at best delay fiscal problems with the road funding system, as the same underlying trends would still affect road revenues despite the new influx of EV fees. There are not yet detailed proposals under consideration by Congress to achieve federal Medicaid spending reductions, but the Congressional Budget Office (CBO) estimated that reducing the safe harbor limit for provider taxes could save tens or hundreds of billions of dollars depending on the size of the reduction (Figure 5). If the hold-harmless threshold were reduced to 5%, CBO estimates the federal government would save $48 billion over 10 years.