Senate Finance Committee Chairman Orrin Hatch amended the Senate’s Tax Cuts and Jobs Act Tuesday afternoon to repeal the tax penalty for the uninsured in the Affordable Care Act, make the 20% corporate tax rate permanent and provide more tax relief for pass-through businesses.
The updated chairman’s mark of the legislation also incorporates amendments that were filed by both finance committee Republicans and Democrats.
Other modified provisions include reducing individual rates in some of the tax brackets, from the current 22.5% to 22%; 25% to 24%; and 32.5 to 32%. The child tax credit is also doubled, from the current $1,000 to $2,000.
Greg Valliere, chief global strategist for Horizon Investments, said Wednesday morning that the bill’s provision killing the individual health mandate “complicates the entire tax bill.”
Valliere notes that House GOP leaders had rejected the idea of attaching the Obamacare provision to their tax bill, which should pass on the House floor Thursday or Friday.
“House Republicans would gladly agree in a conference committee to kill the main provision of Obamacare,” he wrote, “but the key issue obviously comes first – are there are enough votes to do that in the full Senate?”
Noting how the Obamacare bill failed in the Senate months ago, “the same cast of characters could oppose it: GOP Sens. Susan Collins, Lisa Murkowski and John McCain (although the latter may vote for the bill),” Valliere said. Other possible no votes could come from Sens. Jeff Flake and Bob Corker, “who are opposed to a tax bill that could lose $1.5 trillion.”
The Senate Finance Committee continued marking up the bill Wednesday morning. The Senate hopes to vote on the bill on Thursday.
Senate Democratic leader Chuck Schumer said Wednesday morning that with the modified plan, “Republicans have put themselves between a rock and a hard place: dramatic tax increases on the middle class or a huge hole in the deficit.”