Senate may keep some Affordable Care Act (ACA) taxes in its healthcare overhaul

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Republican Senators are discussing the option of keeping some of the ACA taxes they long criticized, in the hopes of delaying more drastic funding cuts, particularly to Medicaid. No final decisions have been made, but Republicans are trying to draft an ACA replacement bill before Congress recesses June 30. One tax that could remain is the 3.8% net investment income tax on capital gains, dividends, and interest. Another proposal being floated is to keep all ACA taxes but scale them back.

Health care reform still a White House priority

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President Trump tweeted on April 30 that a “new healthcare plan is on its way. Will have much lower premiums and deductibles while at the same time taking care of pre-existing conditions.” The President’s top aides said they want the U.S. House of Representatives to vote this week on a bill to repeal and replace the Affordable Care Act, though a vote isn’t scheduled yet and Republicans say they still lack the votes to pass it. Even if the plan passes the House, it’s expected to face a tough fight in the Senate.

Proposed bill would freeze IRS funding at 2016 level

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After the passage of a Continuing Resolution on April 28 that funds the government for an additional week, Congress has turned its attention to the Consolidated Appropriations Act of 2017, which would fund the government through the fiscal year. The bill provides $11.2 billion for the IRS — freezing agency funding at the fiscal year 2016 enacted level. Among other IRS-related prohibitions, the bill forbids proposed regs related to political activities and the tax-exempt status of Sec. 501(c)(4) organizations.

Recent tax regulations to be re-examined

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President Trump signed an Executive Order directing the Treasury to review tax regs adopted during the past 18 months under former President Obama. According to Treasury Secretary Steven Mnuchin, the re-examination of these regs is to ensure that they “do not unduly strain the American economy.” Regs that are determined to be “harmful rules that impose unnecessary costs and complexity on taxpayers” are to be revised or repealed. Mnuchin said the corporate inversion regs will be “one of the things we would be looking at.”