Republicans in Congress are plowing ahead on tax reform, and one obstacle is the complexity of Senate budget rules that limit how much taxes can be cut. The good news is that for once Washington’s fiscal fictions could be deployed to improve policy by repealing ObamaCare’s individual mandate as part of tax reform.
The Senate Finance Committee on Thursday released the details of its tax proposal, which includes a permanent 20% corporate rate and more. Senators Pat Toomey and Bob Corker cut a budget deal to allow for $1.5 trillion in net tax cuts over 10 years without accounting for faster economic growth (and more revenues) as a result of reform.
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Repealing ObamaCare’s individual mandate will save $338 billion over 10 years, according to a new analysis from the Congressional Budget Office. The CBO said Wednesday it is changing the way it analyzes the mandate (and likely reducing the assumed cost impact) but said it is holding off on making those changes because the work is not complete.
House Ways and Means Committee Chairman Kevin Brady, R-Texas, isn’t giving up on including a repeal of Obamacare’s individual mandate in the GOP’s tax reform bill.
Brady told radio host Hugh Hewitt Tuesday that he is still considering including mandate repeal in the tax bill, which was being marked up by his committee on Tuesday. Brady said he is expecting an updated score from the nonpartisan Congressional Budget Office on the impact of including repeal.
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Conservatives are attempting to revive efforts to gut Obamacare’s individual mandate as part of the Republican overhaul of the tax code.
But the House’s top tax writer, while leaving the door open to a measure President Donald Trump supports, said Friday that such a move would complicate the tax package’s prospects, particularly in the Senate.
“The president feels very strongly about including this at some step before the final process,” House Ways and Means Chairman Kevin Brady said of mandate repeal during a POLITICO Playbook interview. “No decisions have been made.”
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President Trump recently tweeted that GOP tax-writers should include a repeal of the Affordable Care Act’s individual mandate in their tax reform legislation. This is a singularly bad idea that most Republicans are likely to reject. (Senators Tom Cotton and Rand Paul are exceptions, having seconded Trump’s suggestion.) It would be irrational and unproductive at this point to import the fractious political combat associated with health-care reform into tax negotiations that are already loaded with controversies.
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The Trump administration has prepared an executive order that would unravel Obamacare’s individual mandate, but has put it on hold to see whether it might be included in the Republican tax bill instead, a GOP senator told the Washington Examiner.
According to the senator, an executive order is sitting with the Office of Management and Budget waiting for approval. President Trump decided to delay the executive order after Sen. Tom Cotton, R-Ark., pushed for the inclusion of the individual mandate repeal in the tax bill, and has been supportive of its inclusion in statements he has made on Twitter.
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House Speaker Paul Ryan said he was confident the House would pass the GOP’s tax reform legislation before its self-imposed Thanksgiving deadline, adding a repeal of Obamacare’s individual mandate could still be included in the final version of the proposal.
“Yes, we are on track for moving this through the House before Thanksgiving, that’s our plan,” Ryan told “Fox News Sunday” in an interview taped Friday. “We expect our friends in the Senate to be about a week behind us.”
Ryan said doing away with the controversial individual mandate measure in the Affordable Care Act was still on the negotiation table among House Republicans.
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President Donald Trump called Wednesday for repealing the Obamacare individual mandate in a tax overhaul, a day before House GOP leaders planned to unveil a bill without that provision.
In a pair of tweets, Trump said: “Wouldn’t it be great to Repeal the very unfair and unpopular Individual Mandate in ObamaCare and use those savings for further Tax Cuts for the Middle Class. The House and Senate should consider ASAP as the process of final approval moves along.”
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“It is a have-to-get-done that’s really hard to get done,” said one lobbyist.
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axpayers who do not have minimum essential coverage (through an employer, a government program, or individual insurance) or qualify for an exemption must pay an individual responsibility tax. The tax is calculated on a monthly basis and is the greater of either a fixed dollar amount or 2.5 percent of household income above the tax filing limit, up to the the national average premium for a bronze (60 percent actuarial value) health plan.
The IRS has announced that for the 2016 tax filing season the average bronze plan premium used for calculating the maximum penalty will be $232 for each member of a tax household up to $1,360 for five or more members.
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