Tax-Cuts Depend on Healthcare Reform Success
Republicans in congress are all talking about repealing and replacing Obamacare. We hear about it almost everyday. As important as a good healthcare plan is, be it Obamacare or something else, people are more concerned about another issue that’s tied in with the repeal - tax cuts. Trump and company have repeatedly announced that there can be no “massive tax cut” until health care reform is complete.
Unfortunately, the reform bill that stands before the senate at the moment faces opposition from both Republicans and Democrats. On top of that, statements like these make us wonder what the biggest motive actually is - the well being of the people, tax cuts, or simply the success of future endeavors: “If we are not able to move forward with health-care reform, it endangers tax reform,” Representative Bill Flores of Texas, a former chairman of a House conservative caucus, said. “The folks that were able to tear this down would feel like they’re empowered to tear the next big project down.”
We can all agree that healthcare is Trump’s priority right now for a lot of reasons. The success of his new plan will practically decide if he’ll sink or swim with the American people. On top of that, his successes here will influence most every other project his team takes on. Currently, the new plan doesn’t have enough votes to pass. Republicans are scrambling to make small changes in order to make this specific reform easier to swallow. As many feared, high income families are the clear winners while low income Americans might suffer.
Trump does have another option if the healthcare legislation stalls. Leaders could try to salvage portions of the bill and Frankenstein it together with tax legislation. The package would still be guarded from a Democratic filibuster, provided that it reduces the deficit. Moreover, a larger bill would give leaders more “carrots” to pass out in return for votes.
As mentioned above, all the Republicans’ goals will all be tough to achieve if health care reform doesn’t go smoothly in 2017. Rewriting the tax code wouldn’t be as “pro-growth”. Averting a government shutdown when funding expires on April 28, as well as raising the debt limit later this year will also be tough, requiring significant Democratic support. Not to mention Trump’s approval rating would surely plummet even further.
A quick closing note:
Watching the Obamacare reform closely will help you know what to expect from the future tax plan and the future success of the Republican party. Pay attention to your investments and the rules surrounding them as well.