The Senate Finance Committee Nov. 9 released its version of tax reform following the House Committee on Ways and Means markup of the Tax Cuts and Jobs Act (H.R. 1). The vote, which fell along party lines with 24 Republicans voting for the bill and 16 Democrats voting against it, means that the legislation may now be brought to the full House floor as early as next week.
AAMC President and CEO Darrell G. Kirch, MD, Nov. 9 issued a statement on the House legislation, noting, “Provisions in the legislation passed by the House Ways and Means Committee would have a damaging impact on the nation’s medical schools and teaching hospitals, and on the patients we care for, the students and residents we teach and train, and the millions of Americans who gain hope from the research we conduct.” Those provisions include changes to private activity bonds (PABs), a critical source of funding for academic medical centers, an excise tax on endowments, an excise tax on compensation for certain employees, and the repeal of credits and deductions that help graduate students with their tuition and expenses.
The AAMC joined 45 higher education associations in a Nov. 6 letter led by the American Council on Education to House Ways and Means leadership expressing concern regarding the proposed legislation’s impact on schools and students. The AAMC also joined the Public Finance Network and Municipal Bonds for American coalition in letters opposing the provisions that that would eliminate the tax exemption for private activity bonds (PABs) and advance refunding bonds.
The Senate Finance Committee’s legislation has several critical differences from H.R. 1. The Senate bill would maintain the ability of individuals to deduct medical expenses, an item that was excluded in the House bill. The Senate bill also does not include the House bill’s changes to the PABs that would have severely impacted the ability of academic medical centers to secure financing of capital improvements. Finally, the Senate bill does not include many of the provisions that would have repealed credits and deductions that make graduate and professional education more affordable. Both versions do not currently include a repeal of the individual mandate included in the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152).
Because of the differences between the House and Senate legislation, the two chambers will likely go to conference to hammer out the details of the final package. In the coming week, the House will likely vote on H.R. 1 and the Senate Finance Committee will begin to mark-up its legislation. The Senate aims to bring its legislation to the floor for a vote after Thanksgiving.