Both the House and the Senate moved swiftly and passed a $1.5 trillion piece of Tax Legislation which is the most sweeping tax overhaul in decades. The bill will now be sent to President Trump to sign into law.
Wednesday's re-vote in the House split mostly along party lines, 224 to 201, as it did 24 hours earlier. Twelve Republicans voted against the measure, along with all the Democrats. To view the legislation in its entirety, please visit http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf.
The National Association of Free and Charitable Clinics remains very concerned with the implications and unintended consequences of this large-scale legislation, especially the following provisions:
- Elimination of the Individual Mandate: The tax legislation reduces the ACA individual shared responsibility payment to zero by January 1, 2019. Experts argue that the elimination of the individual mandate without a market stabilization plan in place will result in a significant increase in premiums, which would in turn substantially increase the number of uninsured Americans. The Congressional Budget Office projects the change will increase insurance premiums and lead to 13 million fewer Americans with insurance in a decade, while also cutting government spending by more than $300 billion over that period.
- Doubling the Standard Deduction for Individuals and Couples: The change to double the standard deduction will reduce the number of taxpayers who itemize and therefore significantly reduce the value of the charitable deduction leading to a decline in charitable donations to all nonprofits. Recent estimates found that up to 95% of Americans will no longer be incentivized to continue to give to charity if the standard deduction is doubled.
- The Mortgage Interest Deduction Gets Smaller: Under the current tax code, taxpayers can deduct any interest they pay on up to $1 million worth of mortgage loans. House Republicans tried to cap that at $500,000 for new loans (existing mortgages are unaffected by the plan) but in the final version there is a $750,000 cap.
The NAFC will closely monitor the tax legislation and its enactment. Additionally, the NAFC staff is keeping a very close eye on the reauthorization and appropriation of CHIP (Children’s Health Insurance Program), the reauthorization and appropriation of Community Health Center funding, as well as efforts to avoid a government shut-down.