President Donald Trump just added complications to the Republican tax-reform debate.
The president on Monday called for major changes to the tax plans currently working their way through Congress. In a tweet sent while he was in Asia, Trump said he is “proud” of lawmakers for getting “close” to approving a tax bill but added that he wants to see more tweaks.
He urged Republicans to repeal the Affordable Care Act provision requiring most Americans to buy insurance or pay a penalty. By doing so, the GOP could then chop the top individual income tax rate to 35 percent with “all the rest going to middle income cuts,” the president contended.
Trump’s tweet adds confusion to an already complicated and contentious process to overhaul the tax system. Lawmakers aim to balance raising revenue to pay for major tax cuts without losing GOP votes and endangering the bill.
Scrapping Obamacare’s individual mandate would save the government $338 billion over 10 years, the Congressional Budget Office estimated this month, giving the GOP more room to chop rates. However, any proposal to do so will prove politically contentious, partly because the CBO projects 13 million more Americans would be uninsured by 2027.
Average health insurance premiums are also expected to rise without the individual mandate.
The House Ways and Means Committee already decided not to put the individual mandate repeal into its tax plan. The panel approved a tax bill last week, and House Republicans want the full chamber to pass it this week.
House Republicans already face a challenge in holding on to blue-state GOP votes due to its proposed plan to end state and local tax deductions.
The Senate has proposed its own bill that it will mark up, or debate and amend, starting Monday.
Trump’s proposed top rate of 35 percent is lower than those in the House and Senate plans. The House would keep the highest income-tax bracket at 39.6 percent. The Senate bill would cut it slightly to 38.5 percent.
The president’s call for an even lower rate on high-income Americans would likely spark more criticism from Democrats who say the GOP plan goes much further to help wealthy Americans than middle-income workers.