CCH Tax Day Report
President Trump has retaken the position that repeal and replacement of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) should occur before comprehensive tax reform. “We’re going to have a phenomenal tax reform, but I have to do health care first,” Trump said in an interview airing on April 12. “If you don’t do that, you can’t put any of the savings into the tax cuts and tax reform,” he added. Trump had previously said he was prepared to move on from health care to tax reform (TAXDAY, 2017/03/27, C.1).
As for the original projected August time line for tax reform, Trump said he does not want to put any deadlines on reform initiatives. “If it (health care) does not happen fast enough, I will start the taxes. But the tax reform and the tax cuts are better if I can do health care first,” Trump said.
Echoing Trump’s stance on prioritizing health care before tax reform, Mick Mulvaney, director of the Office of Management and Budget (OMB), said on April 12 that he agrees health care reform should come first, because it “makes things a lot easier.” According to Mulvaney, tackling health care first is still “the plan” and will better provide an ability to “drive the debate about taxes” if it is taken care of first.
“The House had some issues it had to resolve amongst itself,” Mulvaney said while referring to the internal discord among House lawmakers that triggered the health care bill to be pulled from the House floor just prior to its scheduled vote. “Since the House has been working on it a little bit more organically over the last couple of weeks, I think you start to see some slow progress, and I think we’re making progress on getting (ACA) repealed,” he added.
As for whether tax reform legislation will be enacted before the end of 2017 and when it will be effective, much of that remains to be seen, according to White House Press Secretary Sean Spicer. Spicer said on April 12 that accomplishing tax reform by the end of this year is still the Trump administration’s goal, but has indicated that the process is still in the beginning phases (TAXDAY, 2017/04/11, W.1).
There has been debate recently around the question of when tax reform will become effective, even if enacted in 2017. Spicer did not add much certainty to the mix, noting that those discussions will still need to take place. “To get ahead of when that reform will go into place, whether it’s fiscal year 2017 or fiscal year ’18, again that will be probably part of the discussion,” he said.
Spicer did note, however, that accomplishing both the business and individual side of tax reform simultaneously is the administration’s goal. There has been talk on Capitol Hill about whether the reform will take place piece meal, though many lawmakers have agreed that the two sides are significantly intertwined such that simultaneous reform is needed. “We’ve got to look at both the corporate side and then making sure that we really get some relief to middle-class Americans,” Spicer said.
By Jessica Jeane, Wolters Kluwer News Staff