GOP con­sid­ers us­ing tax bill to stop ACA tenet

Broadly, the GOP tax bill would sharply lower the cor­po­rate tax rate from 35 per­cent to 20 per­cent and cut in­come tax rates on all lev­els of in­come be­low $1 mil­lion. It would also ex­pand some tar­geted tax ben­e­fits, par­tic­u­larly for cor­po­ra­tions. To off­set

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WASHINGTON (WPNS) — House Repub­li­cans grap­pled Fri­day with the difficulty of turn­ing their new tax plan into law, mak­ing a change that would make the pro­posal’s tax cuts for in­di­vid­u­als less gen­er­ous and en­ter­tain­ing a con­tro­ver­sial pro­posal from Pres­i­dent Don­ald Trump to use the tax bill to re­peal a cen­tral el­e­ment of the Af­ford­able Care Act.

Repub­li­cans changed the tax over­haul, which was an­nounced Thurs­day, to cut $81 billion from the tax breaks it would pro­vide to in­di­vid­ual tax­pay­ers. The move was made as law­mak­ers re­al­ized their ini­tial ef­fort would run up against the $1.5 tril­lion in to­tal bor­row­ing over a decade that Congress had au­tho­rized to fi­nance the tax cut plan.

Party lead­ers also took a pre­lim­i­nary step to study Trump’s pro­posal to in­clude lan­guage in the tax bill that would scrap the Af­ford­able Care Act’s in­di­vid­ual man­date, a change non­par­ti­san an­a­lysts say would save the gov­ern­ment more than $400 billion over a decade but also would leave 15 mil­lion more Amer­i­cans with­out health in­surance.

Repub­li­cans re­leased their pro­posed over­haul of the per­sonal and cor­po­rate tax code on Thurs­day af­ter months of ne­go­ti­a­tions, but Fri­day’s last-minute changes

showed how chal­leng­ing it would be to fi­nal­ize the law by year’s end.

The de­ci­sion to re­duce ben­e­fits for in­di­vid­ual tax­pay­ers threat­ens to re­in­force per­cep­tions the bill is tilted to­ward help­ing the wealthy and cor­po­ra­tion at the ex­pense of middle-class Amer­i­cans.

Repub­li­cans plan to save the $81 billion over a decade by chang­ing the way the bill mea­sures in­fla­tion, a shift that would move tax­pay­ers into higher-tax brack­ets more quickly and prob­a­bly hit middle-class tax­pay­ers harder than the very wealthy.

Un­der­min­ing the Af­ford­able Care Act through a tax over­haul, mean­while, prob­a­bly would draw the same type of op­po­si­tion that ear­lier ef­forts did in the Se­nate, doom­ing sev­eral such at­tempts to re­peal what some call Oba­macare ear­lier this year. Many in Congress say such an ef­fort would de­stroy Repub­li­cans’ chance of pass­ing ma­jor leg­is­la­tion this year.

Still, un­der heavy pres­sure from Trump, House Ways and Means Com­mit­tee Chair­man Kevin Brady, R-Texas, said he would ask the Con­gres­sional Bud­get Of­fice to as­sess the im­pli­ca­tions of re­peal­ing the in­di­vid­ual man­date as part of the tax over­haul, the first step to­ward in­clud­ing the pro­posal in the bill.

“The pres­i­dent feels very strongly about in­clud­ing this at some step be­fore the fi­nal process,” Brady said at a Fri­day event hosted by Politico. “He’s told me that twice by phone and once in per­son.”

Brady also sug­gested he was un­likely to ul­ti­mately adopt the change Trump had per­son­ally pushed him to make, not­ing the pos­si­bil­ity such a change would sink the bill’s hopes in the Se­nate.

“Im­port­ing health care into the tax re­form de­bate has con­se­quences, es­pe­cially when the Se­nate has yet to pro­duce 50 votes on any­thing re­lated to health care that I’m aware of,” Brady said. “Clearly you’re bring­ing a whole new el­e­ment into pro-growth tax re­form.”

Nu­mer­ous White House of­fi­cials be­lieve at­tach­ing changes to the Af­ford­able Care Act to the tax pack­age would be a ter­ri­ble idea, po­ten­tially doom­ing the en­tire tax bill, ac­cord­ing to sev­eral peo­ple with whom the of­fi­cials have spo­ken but who were not per­mit­ted to dis­close the White House strat­egy.

Trump re­mains en­am­ored with the idea, driven by con­ver­sa­tions with Sen. Tom Cot­ton, R-Ark., and Sen. Rand Paul, R-Ky., who are pro­mot­ing it ag­gres­sively.

House con­ser­va­tives are push­ing — gen­tly, for the mo­ment — to in­clude the man­date’s re­peal in the tax leg­is­la­tion.

“It’s good pol­icy. It’s the right thing to do,” Rep. Jim Jor­dan, R-Ohio, a leader of the GOP’s hard-right bloc, said Fri­day. “I don’t know why we wouldn’t.”

Brady said other ad­di­tional, “more sub­stan­tive” changes to the bill are com­ing Mon­day, when the Ways and Means Com­mit­tee starts a mul­ti­day meet­ing to de­bate the bill and po­ten­tial changes to it.

Broadly, the GOP tax bill would sharply lower the cor­po­rate tax rate from 35 per­cent to 20 per­cent and cut in­come tax rates on all lev­els of in­come be­low $1 mil­lion. It would also ex­pand some tar­geted tax ben­e­fits, par­tic­u­larly for cor­po­ra­tions. To off­set the rev­enue lost be­cause of those cuts, the bill would elim­i­nate de­duc­tions in­di­vid­u­als and busi­nesses have re­lied on for decades — changes that prom­ise to spark both in­ter­nal tu­mult in the GOP and in­tense lob­by­ing pres­sure from pow­er­ful in­dus­tries and in­ter­est groups.

Some changes were im­me­di­ately con­tro­ver­sial, es­pe­cially a plan to limit a pro­vi­sion in cur­rent tax law that al­lows home­own­ers to deduct in­ter­est pay­ments made on their mort­gages.

But there were in­di­ca­tions Fri­day the sharp in­ter­nal di­vi­sions over a sep­a­rate pro­posal to scale back an ex­ist­ing break that al­lows in­di­vid­u­als to deduct tax pay­ments made to state and lo­cal gov­ern­ments from their fed­eral tax li­a­bil­ity could be eas­ing. The bill would still let tax­pay­ers deduct up to $10,000 in prop­erty taxes, though it would elim­i­nate the abil­ity to deduct any state in­come tax paid.

That com­pro­mise ap­pears to have ap­peased many of the ini­tial hold­outs. While a hand­ful of Repub­li­can mem­bers from New York and New Jersey said they would op­pose the bill as writ­ten, one key mem­ber who had ne­go­ti­ated a com­pro­mise with lead­er­ship de­clared Fri­day that he was sat­is­fied.

“There are a num­ber of us in the high-tax states that I’ve talked to that re­al­ize, we just a got a huge win,” said Rep. Tom MacAr thur, R-N.J.

Democrats on Fri­day con­tin­ued their crit­i­cism of the bill, paint­ing it as a give­away to cor­po­ra­tions and the wealthy that would bal­loon the deficit while pro­vid­ing lim­ited ben­e­fits to the middle and work­ing class.

Ac­cord­ing to an anal­y­sis of the orig­i­nal bill from the non­par­ti­san Joint Com­mit­tee on Tax­a­tion, the ini­tial Tax Cuts and Jobs Act di­rected about 21 per­cent of its cuts to in­di­vid­u­als of all in­come lev­els. Mean­while, busi­nesses reaped about 68 per­cent of the ben­e­fit, while a planned elim­i­na­tion of the es­tate tax — which ap­plies only to the wealthy — would make up 11 per­cent of the over­all rev­enue re­duc­tion. The changes Brady pro­posed Fri­day would fur­ther tilt the bill’s dis­tri­bu­tion of tax cuts to­ward cor­po­ra­tions.

With those changes in­cluded, the share of the bill’s ben­e­fits go­ing to in­di­vid­u­als would drop to 16 per­cent, ac­cord­ing to the JCT.

A new JCT anal­y­sis late Fri­day re­ported fam­i­lies earn­ing be­tween $20,000 and $40,000 would see a net tax in­crease in 2023 and be­yond. The in­crease is likely be­cause some tax cred­its aimed at help­ing the middle class ex­pire in 2023 such as the Fam­ily Flex­i­bil­ity Credit. A large per­cent­age of up­per middle class in­di­vid­u­als are also at risk of fac­ing tax in­creases, pre­vi­ous re­search has shown.


Kevin Brady, House Ways and Means Com­mit­tee chair­man, speaks Wednesday.

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