Tax reform was the key topic on Capitol Hill last week, with the President lunching with member of the House and Senate Conference Committee team and then making remarks promising tax reform by Christmas at – view those remarks here. That afternoon the conference team finalized the deal to reconcile the differences in the House and Senate versions of the tax reform bill. Full text of the bill is available here. The House is expected to vote on the bill on Tuesday, December 19, followed by a Senate vote on Wednesday, December 20. Senator Corker (R-TN) and Senator Rubio (R-FL), who both expressed reservations about their support, are now said to be onboard to vote for the bill. Senator McCain (R-AZ) is expected to miss the vote, but his vote may not be required if 51 other Senators have already expressed that they will vote yes.
More Information on the Final Tax Bill:
Key disability provisions of the bill posted online:
- Individual Mandate under ACA is repealed
"Elimination of Shared Responsibility Payment for Individuals Failing to Maintain Minimal Essential Coverage. The conference agreement follows the Senate amendment." (p 153)
- Disabled Access Credit is kept
"Repeal of credit for expenditures to provide access to disabled individuals. ... The conference agreement does not follow the House bill provision." (p 290)
- Work Opportunity Tax Credit is kept
"Repeal of work opportunity tax credit. ... The conference agreement does not follow the House bill provision." (p 285)
- Orphan Drug credit is reduced to 25%
"Repeal of credit for clinical testing expenses for certain drugs for rare diseases or conditions. ... The conference agreement follows the Senate amendment, but reduces the credit rate to 25 percent of qualified clinical testing expenses." (p 282)
- The medical expense deduction is NOT repealed and is expanded for a two year period
- The tax-preferred status of private-activity bonds that are used to finance affordable housing is preserved
- The Johnson Amendment (allowing certain nonprofits to express support for political candidates) is removed
Joint Explanatory Statement: http://docs.house.gov/billsthisweek/20171218/Joint%20Explanatory%20Statement.pdf
ANCOR is pleased to see the bill has improved from previous versions, but still believes there is significant work to be done including on changes to the charitable tax deduction. Further, we continue to caution that the tax cuts in the bill will create pressure on Congress to cut funding for safety net programs such as Medicaid, because the tax cuts will reduce federal revenue overall. This has been confirmed by the U.S. Treasury, which stated in a one-page analysis of the tax bill that it would not pay for itself. Despite Treasury Secretary Mnuchin’s past comments that the bill would pay for itself, the analysis said the bill would need “a combination of regulatory reform, infrastructure development, and welfare reform” to be paid for. Contributing to ANCOR’s concern are statements by House Speaker Ryan confirming Congressional interest in entitlement reform, and a PoliticoPro report that the President is preparing an executive order that will enact entitlement reform at the administrative level – including Medicaid work requirements and reducing eligibility for housing supports.