Post by Jennifer (Tink) on May 7, 2017 5:49:58 GMT 8
Healthcare Bill Really About Tax Cuts
That is where the American Health Care Act comes in: It would eliminate roughly $1 trillion in taxes used to pay for the additional spending in Obamacare. As a result, it would significantly lower the federal government’s tax revenue baseline. The baseline is an important figure in congressional budgeting, because it sets expectations for how much the government is projected, on paper, to spend and raise if current law remains the same.
The trick, then, is to make the health care bill’s tax cuts part of that baseline by passing them into law before a tax-reform package. This would provide Republicans with far more room to permanently cut taxes later in the year. In short, Republicans would be able to devise a tax bill that collects about $1 trillion less in revenue but that would still qualify as revenue-neutral under Senate procedure.
This is why Republicans put health care reform at the top of their agenda. Without the bill to reset the federal government’s baseline tax revenue, Republicans would be much more constrained when it came time to overhaul the tax code.
Republicans have often struggled to recommend their health care plan on its own terms. Representative Dave Brat of Virginia, a member of the conservative House Freedom Caucus, called the initial version of the bill “dead on arrival” and the current version “not the repeal bill we all wanted.” On Thursday, he voted to pass it anyway.
But Republicans have consistently promoted their health care bill’s advantages as a tax cut and a setup for tax reform. After the House’s passage of the bill, President Trump said it “really helps” to get the biggest tax cut in the nation’s history.
In March, for the earlier version of the bill, Speaker of the House Paul Ryan explained the need to move quickly. “The schedule that we have here is very aggressive, and we can’t get to tax reform until we do this,” Mr. Ryan said.
The trick, then, is to make the health care bill’s tax cuts part of that baseline by passing them into law before a tax-reform package. This would provide Republicans with far more room to permanently cut taxes later in the year. In short, Republicans would be able to devise a tax bill that collects about $1 trillion less in revenue but that would still qualify as revenue-neutral under Senate procedure.
This is why Republicans put health care reform at the top of their agenda. Without the bill to reset the federal government’s baseline tax revenue, Republicans would be much more constrained when it came time to overhaul the tax code.
Republicans have often struggled to recommend their health care plan on its own terms. Representative Dave Brat of Virginia, a member of the conservative House Freedom Caucus, called the initial version of the bill “dead on arrival” and the current version “not the repeal bill we all wanted.” On Thursday, he voted to pass it anyway.
But Republicans have consistently promoted their health care bill’s advantages as a tax cut and a setup for tax reform. After the House’s passage of the bill, President Trump said it “really helps” to get the biggest tax cut in the nation’s history.
In March, for the earlier version of the bill, Speaker of the House Paul Ryan explained the need to move quickly. “The schedule that we have here is very aggressive, and we can’t get to tax reform until we do this,” Mr. Ryan said.
