Senate Republicans linked on Tuesday their tax plan to a repeal of the ObamaCare mandate which demands that people buy health insurance, or otherwise pay a penalty. This, however, may prove to be a hurdle in their attempts to reshape the tax code by the end of this year. This alteration was proposed by President Donald Trump and would provide over $300 billion in government funding to cover Republicans’ tax cuts in the next decade, which they have expressed optimism about.
“We’re optimistic that inserting the individual mandate repeal would be helpful,” Senate Majority Leader Mitch McConnell said on Tuesday.
The Congressional Budget Office, which made these projections, also predicted that for many Americans the individual mandate’s repeal would increase insurance premiums by about 10 percent.
On the other hand, the bill would leave about 13 million American citizens without health coverage in the next 10 years. Even though this would save money that is now provided by federal subsidies, this risks Democrats opposing the tax bill, which in turn may lead to it not being passed by the year’s end. Some Republicans as well refused to support the addition of the repeal.
Senator Susan Collins said she would not support the bill if the Senate doesn’t pass a bipartisan bill to keep other aspects of ObamaCare. The Senate Finance Committee suggested that the savings of the mandate repeal could be used to enable individuals to claim larger child tax credits, as well as to lower income tax rates for the middle class.
It was also announced by Senate Republicans that the individual tax cuts will not be permanent and will expire by the end of 2025. This ensures that there is no violation of the Senate’s rules that prohibit legislation from raising the deficit after a decade. A tax cut in the corporate rate of 35 to 20 will be permanent. The House is to vote on its own version of the tax plan as early as Thursday.
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