(REITs), are allowed a 20% deduction for domestic business profits (the section 199A deduction). Remittance Transfers: OBBB imposes a remittance tax of 1% payable by the sender of cash and cash equivalents to recipients outside the United States. Transfer provider must collect the remittance tax and has secondary liability if the tax is not collected. There are exceptions for transfers funded with a U.S. debit or credit card or from an account held with certain financial institutions. Estate and Gift Tax Exemption: OBBB permanently increased the estate and gift tax exemption to $15 million per individual, with inflation adjustment after 2025. Individual Income Tax Rates Under Tax Cuts and Jobs Act: OBBB makes the 37% top marginal rate permanent. State and Local Tax (SALT) Deduction Cap: OBBB increases the cap to $40,000 for 2025, with an annual increase of 1% per year through 2029. The cap is reduced to $10,000 for those with income above $600,000 (with annual 1% increases to this income threshold). Excise Tax on Investment Income of Private Universities: OBBB creates a tiered system with three rate brackets ranging from 1.4% to 8% based on the size of the institution’s endowment (determined on a per-student basis). This applies to taxable years beginning after December 31, 2025. Health Care Provisions: Health care analysts have commented that every state’s health care system will be adversely affected by the OBBB in a multitude of ways, and New Mexico, being a poor state heavily dependent on government assistance, may feel the effects more acutely than most. Based on most recent estimates, New Mexico stands to lose $2.8 billion in Medicaid funding and at least $224 million in cuts to SNAP benefits (food stamps). As a result, it’s estimated that 88,000 New Mexicans will lose Medicaid coverage while about 58,000 will likely lose SNAP benefits. The New Mexico Health Care Authority (HCA) also estimates that at least six rural hospitals may close, and jobs may drop by 2% across the state. According to Kari Armijo, cabinet secretary for the Health Care Authority, facilities in Gallup, Las Vegas, Taos and Union County are those currently at the highest risk for closure. The nonpartisan Congressional Budget Office has found the legislation is set to strip nearly $700 billion in Medicaid and $267 billion in SNAP funding by 2034, while increasing the number of Americans without health insurance by 16 million. It’s going to hit New Mexico particularly hard in both of these areas, as nearly 40% of our state’s population is on Medicaid and 23% enrolled in SNAP. According to the HCA, New Mexico stands to lose more than a quarter of its annual Medicaid funding, a large percentage of which would have supported reimbursement to health care providers. The outlook for SNAP is similarly bleak, with the state estimated to lose anywhere in the range of $224 million to $352 million in the first year alone. However, analysts believe that these numbers alone don’t paint the full picture of how dire the situation truly is. The budget bill also imposes new community engagement and work requirements for Medicaid and SNAP recipients, requirements the HCA said would create additional red tape and mountains of paperwork for the 254,000 Medicaid enrollees in New Mexico and the 175,979 SNAP recipients in the state. Cuts aren’t just limited to New Mexico’s Medicaid program, but are set to massively affect the state’s hospitals and BeWell, the state’s health insurance marketplace. Sara Fitzgerald, director of policy and compliance at BeWell, said the bill will create narrower eligibility requirements and more obstacles to enrollment while also driving up health insurance premiums. “Ultimately, that makes it harder to get coverage, harder to keep coverage and harder to afford coverage, which at the end of the day spells decreased coverage,” Fitzgerald said. Every analysis of the legislation, including that of state officials, suggests that it may well make life for the average American much more difficult. In a state like New Mexico, where we operate on thin margins and depend greatly on the federal government, it’s going to exacerbate existing problems. One of our state’s most persistent issues is our healthcare system, and the OBBB will make healthcare both more expensive and inaccessible for many New Mexicans. 8
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