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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

Chairman Camp Unveils Tax Reform Proposal

February 28, 2014— House Ways and Means Committee Chair Dave Camp (R-Mich.) Feb. 26 released a comprehensive tax reform proposal that lowers the top individual tax rate by eliminating a number of deductions, including education and health incentives.  The draft “Tax Reform Act of 2014” was three years in the making, but has little chance of moving in an election year.

Impacting medical student financial aid, the proposal:

  • Consolidates the Hope credit, lifetime learning credit, and tuition deduction into a permanent American Opportunity Tax Credit (AOTC) that excludes graduate and professional education;

  • Eliminates the Student Loan Interest Deduction (SLID); and

  • Taxes Public Service Loan Forgiveness (PSLF) and National Health Service Corps (NHSC) loan repayment.

According to a sample repayment scenario prepared by the AAMC, certain physicians could have more than $200,000 forgiven under PSLF.  The draft reform bill would create a sizeable tax in the forgiveness year, potentially making it unaffordable for physicians to participate in the program. 

Of possible interest to teaching hospitals, the proposal repeals:

  • The credit for clinical testing expenses for certain drugs for rare diseases or conditions;

  • The tax exemption for qualified nonprofit health issuers under the Affordable Care Act (ACA) co-op program; and

  • The medical device excise tax.

Chairman Camp’s proposal would make permanent a modified research tax credit using only the alternative simplified research credit (ASC). The draft bill would continue to exempt from unrelated business income tax (UBIT) income derived from research, but only on research that universities have made available to the public.

Contact:

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116
Email: mshick@aamc.org

Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499
Email: ibaer@aamc.org

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org