During the latest Facing the Future, Adam Lord, a manager at the CPA firm Penchansky & Co. in Manchester, New Hampshire discussed the 2017 tax legislation and how some of the changes impacted taxpayers.
As a millennial and member of The Concord Coalition’s New Hampshire advisory board, Lord said his generation needs to step up and become more involved in the conversations on issues like taxes, the economy, Social Security and health care.
When it comes to needed reform, he said, the Millennial Generation will likely bear more of the cost of changes to health care and retirement programs than other generations. One of the reasons he got involved with Concord was to help give a voice to millennials.
“There’s very little talk from our generation, and we’re the one directly affected by it,” he added.
The 2017 Tax Cuts and Jobs Act brought many changes in the tax code and accounting methods. Unfortunately, it has worsened the government’s financial situation. Since the legislation took effect, tax revenues have decreased as a percentage of the economy and federal budget deficits continue to widen.
Lord summarized many of the changes in the code, including lower marginal tax rates, higher standard deductions and changes to how some itemized deductions work. And he said many people have been surprised by how some of those changes impact them.
One example he gave was individuals inaccurately estimating their income taxes. Their tax withholdings in their paychecks were insufficient, and by the end of the tax year they owed additional money. In such situations, taxpayers often have to pay interest and penalties.
Another change in the tax code Lord discussed was how revenue for what are called “pass-through” entities is taxed. Such business entities are not taxed at corporate tax rates; the owners of these businesses pay based on individual income tax rates instead. Sole proprietorships and limited liability companies are considered pass-through entities.
Lord has seen an increase in these tax-advantaged entities since the 2017 tax code changes. He said there were already a large number of small businesses and pass-through entities, especially in New Hampshire. So he sees this particular tax change as helping equalize the tax code. “The purpose . . . is intended to provide tax relief to businesses not benefiting from the reduction in the top corporate tax rate.”
Portions of a recent public forum “Health Care Costs: Key Federal and State Strategies” were also broadcast during radio program. The forum, hosted at the Warren B. Rudman Center in Concord, New Hampshire, featured three policy experts: Joe Antos, Trish Riley and John McDonough.
Concord’s Executive Director Robert L. Bixby asked them what “key strategy” they would recommend to the U.S. government or states to address rising health care costs.
Antos said, “I would try to align incentives a lot better, not just with doctors, patients and hospitals, but also suppliers, insurance companies and politicians.”
McDonough said, “I think that we have to continue to move toward the system redesign, away from fee-for-service and toward something that really does give the proper incentives, and I think there needs to be some regulatory price muscle in there to some degree.”
Riley said, “We need transparency with the teeth to address pricing . . . the reality is that it takes people coming to the table.”
“Unless and until, as a country, we can have a serious conversation about this without everybody going to their corners, I think any good idea won’t be able to surface,” she added.
Hear more on “Facing the Future.” I host the program each week on WKXL, NHTalkRadio.com (N.H.), and it is also available via podcast. Join me and my guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders, elected officials and candidates for public office. Past broadcasts are available here. You can now subscribe to the podcast on iTunes, Google Play or through RSS.