Tax Cuts and Jobs Act Passes House
December 19, 2017Early this afternoon, the House passed the conferenced version of the Tax Cuts and Jobs Act with a vote of 227-203. All Democrats and 12 Republicans voted against the bill. To see how your member of Congress voted, see this article from The New York Times.
What happens next?
The bill will now make it’s way to the Senate for an up or down vote. No amendments are allowed at this point. There will be up to 10 hours of debate equally divided. Upon the use or yielding back of time, there will be a vote on adoption on the conference report. Leader McConnell (R-KY) intends to hold the vote tonight.
What is in the final bill?
The bill is still projected to create $1 trillion plus budget deficit over ten years. See below for information on any provisions of particular interest to ANCOR members:
- The individual mandate to buy health insurance is repealed.
- The repeal of the Workforce Opportunity Tax Credit has been removed from the bill, meaning businesses will get a tax credit if they hire people with disabilities referred by Vocational Rehab ($2,400 tax credit) or applicants who are veterans ($9,600 tax credit).
- The repeal of the Disabled Access Tax Credit has been removed, allowing small businesses to deduct accessibility expenses.
- The repeal of the Architectural Barrier Renovation tax credit has been removed from the bill, meaning that businesses will be able to get a tax credit of up to $5,000 for renovations to make their businesses more accessible.
- The tax preferred status of private-activity bonds that are used to finance affordable housing is preserved.
- The ABLE Financial Planning Act allowing funds from 529 college savings accounts to be rolled over into ABLE accounts has been included; however, the ability to rollover funds from a 529 account to an ABLE account is repealed after December 31, 2025.
- The ABLE to Work Act is included in the bill. The provision expires on December 31, 2025. As written, advocates warn that there are several technical issues in this amendment that may actually put ABLE account holders at risk.
- The medical deduction is maintained. The threshold is reduced to 7.5% of Adjusted Gross Income for two years and then reverts to 10% of Adjusted Gross Income after December 31, 2019.
- The repeal of the orphan drug tax credit was removed but the tax credit was reduced from the current 50% of expenses to 25%.
What happens if the bill passes the Senate?
The law will then go to President Trump for his signature. There is talk that several smaller bills will be needed to clean up technical and drafting errors that are in the final bill. Stay tuned for that in 2018.
ANCOR continues to oppose the bill
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.
It is not too late to reach out to your Senator, click here to use ANCOR’s action alert.