Speaker, Commissioner Weigh in on Tax Reform; Senate GOP Releases ACA Replacement Bill

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Speaking at separate conferences last week, Speaker of the House Paul Ryan and IRS Commissioner John Koskinen discussed tax reform efforts currently underway in Washington. Senate Republicans also released their proposed repeal of the Affordable Care Act (ACA), which has significant tax ramifications.

 

On Tuesday, Speaker Ryan voiced his preference for permanent reforms over temporary tax cuts because, he stated, mere cuts do not promote growth or provide businesses with the certainty they need. He also said he intends to get reform enacted before the end of 2017. John Gimigliano of KPMG, speaking at the same event, warned that such an aggressive schedule might require legislative shortcuts that will make the process less collaborative and transparent.

 

The following day Commissioner Koskinen said that the IRS does not take a position on policy but is strongly in favor of simplifying the tax code to ease the burden of assisting taxpayers in complying with the law.  He also asked that changes be enacted with sufficient lead time to allow the IRS to prepare their systems.

 

Most taxes and penalties put in place under the ACA are repealed in the "Better Care Reconciliation Act of 2017" discussion draft of a repeal-and-replace effort that the Senate GOP released on Thursday. These include the 3.8% Net Investment Income Tax and the 0.9% Additional Medicare Tax, both currently imposed on taxpayers with income above $250,000. The bill repeals individual and business insurance mandates, but unlike the House version passed last month, it retains federal subsidies for insurance premiums. The Congressional Budget Office score of the bill, a nonpartisan assessment, is expected early this week. Majority Leader Mitch McConnell (R-KY) hopes to bring it to a vote before Congress recesses for the Fourth of July.

 

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