House Republicans approved still more changes to their tax-cuts bill Monday, limiting a new tax increase on private colleges and universities to only the wealthiest schools and altering the way investment managers are taxed as GOP leaders try to build consensus among their members.
On a 24-16 vote, the Ways and Means Committee late Monday approved an amendment with the changes proposed by Rep. Kevin Brady, Texas Republican and the panel’s chairman.
Mr. Brady, though, did brush aside calls from some Republicans to tackle Obamacare-related items as part of the tax overhaul, saying he’ll take that up “separately and immediately” after they’re done with taxes.
It’s unclear whether that was good enough for the growing number of Republicans who say the GOP can earn a lot more revenue to lower taxes by nixing Obamacare’s individual mandate, which would leave the government paying far less money to subsidize Obamacare customers’ insurance.
But Mr. Brady and other Republicans have said inserting health care provisions would further complicate an already difficult process.
“We are working on common-sense temporary and targeted relief from many of these taxes to be acted on in the House before the end of the year,” Mr. Brady said.
Instead of tackling Obamacare, Mr. Brady proposed smaller tweaks to the bill announced late last week.
One change would require certain money managers to hold investments for three years, rather than the current minimum of one year, in order to take advantage of a lower capital gains rate.
Mr. Brady’s amendment would also limit a new 1.4 percent excise tax on certain colleges, applying it only to institutions with endowment assets of at least $250,000 per student.
His new plan also calls for people who claim the Earned Income Tax Credit to provide more information to prove eligibility, and would allow employees of start-up companies to defer some of their stock holdings for tax purposes.
It also allows people to continue to exclude up to $5,000 worth of employer-provided dependent care assistance for children and other family members from their income through 2022.
“This amendment makes modest refinements to the overall tax reform package that delivers tax relief to millions of families and helps our workers and job creators compete and win here at home and around the world,” Mr. Brady said.
Democrats said Mr. Brady was blindsiding them with major revisions.
“This is disgraceful,” said Rep. Sander M. Levin, Michigan Democrat. “This has been just the worst kind of process.
“Are you people essentially authoritarians?” Mr. Levin said.
Mr. Brady countered that both sides introduce amendments with no advance warning.
He announced his amendment five hours into the first day of debate in the Ways and Means Committee on the GOP bill, which slashes the corporate tax rate from 35 percent to 20 percent and streamlines individual tax rates from seven brackets down to four.
Republicans also increased the standard deduction, eliminated a number of existing tax breaks and lowered some of the tax rates, promising most Americans will see a lower tax burden.
The GOP pointed to a study from the Tax Foundation that found a middle-income family would see at least $1,800 more in after-tax income a decade from now.
Democrats, though, said the GOP was using gimmicks to tamp down the already high cost of the bill — some $1.5 trillion in new deficits over the next decade — and said the middle class will end up paying.
“I don’t care whether you live in Dakota [or] Jersey,” said Rep. Bill Pascrell Jr., New Jersey Democrat. “This thing is really shafting everybody. It’s an equal-opportunity shafter, this bill.”
Taxpayers at all income levels would pay less in the short run under the Republican proposal unveiled last week, according to the Joint Committee on Taxation, which scores tax bills for Congress.
But taxes would generally increase in the long run for people making between $20,000 and $40,000, as well as those making between $200,000 and $500,000, according to the committee.