100,000

Prior to an injunction earlier this week, Health and Human Services officials expected 100,000 beneficiaries of the Deferred Action for Childhood Arrivals (DACA) program to become eligible to purchase a marketplace plan created by the Affordable Care Act (ACA). DACA, passed in 2012 and subsequently reauthorized, allowed individuals who were brought to the United States as children and met a list of criteria to remain in the country and receive work authorization. It was given regulatory status by the Department of Homeland Security in 2022, known as the “final rule” which was intended to give DACA recipients stability and strengthen the program. DACA, and the final rule, have been the subject of a variety of litigation since its initial passage. 

In May, the Department of Health and Human Services announced an expansion of the ACA that would make DACA recipients eligible for enrollment in state-run marketplaces, including any subsidized rates for which they qualified. Like the core provisions of DACA, the expansion was immediately met with a legal challenge, drawing 19 states, including Nebraska, as plaintiffs. United States District Court Judge Daniel Traynor sided with the states, granting a temporary injunction that will prevent enrollments to proceed in these 19 states. The case will now proceed to trial. 

 

$0

According to a recent report by ProPublica, hedge fund billionaire Steve Cohen, who also owns the New York Mets, was able to use a decades-old loophole and creative business structuring to completely avoid paying Medicare taxes in 2016.

Medicare taxes were designed to fund the health care program for seniors through the Federal Insurance Contributions Act of 1935, which includes a payroll tax of 2.9% in 2024, split evenly between the employee and employer at 1.45% each. Additional taxes are collected on those earning more than $200,000 annually. 

However, in the case of several billionaires highlighted by the ProPublica report, clever accounting reduced their obligation completely. This was done by structuring businesses as limited partnerships, originally designed to allow for relatively silent investors to be shielded from liability. A 1977 law designed to crack down on government employees being approached with offers to buy a small share of a limited partnership, thereby qualifying them to receive both their government pension and social security benefits, had the unintended consequences of creating a rapid expansion of limited liability companies. In the case of Steve Cohen, he created two separate businesses, both owned by him, that combined created a partnership, with one general partner and one limited partner. Point72 Asset Management earned $344 million in profits over 2015 and 2016, 99.98% of which went to the limited partner and was declared exempt from Medicare tax. Those profits were subject to the 40% income tax rate (about $136 million in tax), but Cohen’s returns showed $0 in self-employment income both years, helping him avoid up to $11 million in Medicare tax. An IRS audit and subsequent litigation is still pending. 

Tax avoidance has long been the subject of political debate, and the limited partnership strategy is but one of many creative accounting strategies used to reduce liability. Many recent conversations have also centered around offshore tax avoidance and ProPublica identified several more ways billionaires have reduced their tax bills significantly, in some cases even completely.  

 

4

Governor Jim Pillen outlined 4 categories of priorities for the upcoming legislative session earlier this month: 

  • Reviving legislation defeated last session to restrict participation in middle and high school sports to align with the student’s chromosomal sex. The governor would like to expand the proposal to include collegiate sports as well. 
  • Revisiting TEEOSA, the state’s mechanism for funding K-12 public education, as a means to reduce property taxes. Governor Pillen has signaled intent to bolster K-12 funding by removing sales tax exemptions or implementing new ones, allowing districts to reduce levies. 
  • Expanding upon an August executive order banning lab-grown meat in the state. 
  • Shift Nebraska to a “winner-take-all” system of apportioning Electoral College votes, awarding all 5 of Nebraska’s votes to the statewide winner in the Presidential contest, instead of each Congressional district being awarded an individual vote. 

 

The 109th Nebraska Legislature will convene on January 8, 2025, beginning a 90-day session.