The potential for tax cuts to be enacted by the Christmas holiday depends on Senate Republicans, President Trump said in a November 20 Cabinet meeting. During the meeting, Trump praised the House for passage of its tax reform bill and stated that he is hopeful the Senate will soon do the same. The White House has also indicated that it does not consider repeal of the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) individual mandate within the tax bill to be an absolute requirement.
“With the Democrats giving us no votes for tax cuts, for purely political reasons…it will be up to the Republicans to come through for America. It’s up to the Senate,” Trump said. “And if they approve it, the House and the Senate will get together—I’ll be there right in the middle of it—and we will come up with a bill that will be spectacular for growth and spectacular for the people of this country,” Trump added.
The Senate Finance Committee (SFC) moved its tax reform bill through committee last week. A full Senate vote is expected when lawmakers return from the Thanksgiving holiday recess.
ACA Individual Mandate
Office of Management and Budget Director Mick Mulvaney said in a November 19 interview that the White House supports repealing the ACA’s individual mandate, but not at the expense of a successful tax bill. The House bill does not address repeal of the individual mandate. The ACA’s provision is another potential sticking point that the two chambers will face when reconciling the bills.
“If we can repeal part of Obamacare and still have a good tax bill that can pass, that’s great,” Mulvaney said. “If it becomes an impediment to getting the best tax bill we can, we’re okay with taking it out.”
Meanwhile, Sen. Susan Collins, R-Me., is cautioning Republican colleagues against including the ACA’s provision in a tax reform measure. “I don’t think that provision should be in the bill,” Collins said in a November 19 interview. “I hope the Senate will follow the lead of the House and strike it”. Collins remains a key vote in the Senate’s ability to pass tax reform legislation, as Senate leadership can only afford to lose two Republican votes on the bill under Senate reconciliation rules.
Senate Democrats have remained largely united in opposition toward Republican efforts at tax reform. A frequent criticism of Democratic lawmakers is that Republicans’ tax reform proposals benefit the wealthy more than the middle class. In responding to Trump’s claims that Democrats will vote no on the bill for purely political reasons, Sen. Bernie Sanders, D-Vt., said, “That’s total nonsense,” in a November 19 interview.
“Democrats have been completely shut out of this process,” Sanders said. “….What they are also doing is making permanent—making permanent the corporate tax breaks, making temporary the tax breaks that benefit working families and the middle class. Absolutely crazy,” he added. Several Republican senators have countered that it is corporate tax relief that will spur economic growth and that the temporary individual tax relief is expected to be extended by Congress in 2025 before such provisions sunset.
By Jessica Jeane, Wolters Kluwer News Staff
Want to know more? Join Wolters Kluwer Principal Analyst Mark Luscombe on Nov. 29 for Tax Legislation Update: Tax Cuts and Jobs Act, a 2-CPE webinar from CCH® CPElink. Mark will present a complete discussion of the proposed legislation and its impact on taxpayers.