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House Ways & Means Committee Issues Proposed Tax Changes

Writer's picture: FirenzeCapitalAdvisorsFirenzeCapitalAdvisors

The House just released a list of options they may use to pay for the next big tax bill to extend current tax cuts. You can read the full text at the link (https://www.politico.com/f/?id=00000194-74a8-d40a-ab9e-7fbc70940000), while some of the key items are summarized here:


  1. 10% Tariff


    Would increase revenue by $1.9 trillion


    Applied to all imports

  2. Border Adjustment Tax


    Increase revenue by $1.2 trillion


    Would create a new consumption tax on imported goods. Basically disallow deductions for costs of imports and eliminate tax on exports

  3. Repeal SALT Deduction ENTIRELY


    Increase revenue by $1 trillion


    This would remove even the $10,000 allowed deduction for state and local tax.

  4. Eliminate Home Mortgage Interest Deduction


    Increase revenue by $1 trillion


    Currently allowed to deduct interest on primary residence - this would eliminate that.

  5. Eliminate Non-citizens from Federal Health Benefits


    Save $35 billion


    Illegal aliens are eligible for some federal health care programs (tax credits and medicaid). This would eliminate that eligibility.

  6. Repeal Green Energy Credits


    Save $796 billion


    Would eliminate clean vehicle, clean energy, efficient building, and other energy credits that were introduced in the Inflation Reduction Act (IRA).


    Cutting additional IRA Green-related credits could add $405 billion in savings.

  7. End the Employee Retention Credit


    $75 billion in savings

  8. SSN Requirement for Child Tax Credit


    $28 billion in savings


    2017 tax reform required this, but it's set to lapse.

  9. Tax College Endowments 14%


    Would increase revenue $10 billion


    Only applies to larger endowments, but is currently set at 1.4%.

  10. Eliminate Non-profit Status for Hospitals


    Would increase revenue $260 billion


    Wow. Hospitals that are 501(c)(3)s would be taxed as for-profit entities.

  11. Disallow Charitable Deduction for Health Orgs


    Would increase revenue $83 billion


    Donations to 501(c)(3) hospitals would not be deductible as charitable.

  12. Tax Scholarship and Fellowship Income


    Would increase revenue $54 billion


    Currently these are excluded as long as they're used on tuition and related expenses. This option would make them taxable.

  13. Tax Employer Provided Transportation and Gym Use


    Would increase revenue $70 billion


    Currently employer-provided gym use is not taxable and transportation up to $315 per month is excludable.

  14. Eliminate Deduction on Student Loan Interest


    Would increase revenue $30 billion

  15. Deny Social Security to those with Felony Warrants


    Increase revenue by $3 billion


    Currently only those "fleeing to avoid arrest" are having this income withheld.

  16. Ban Telehealth Facility Fees


    Increase revenue by $2.3 billion


    This would eliminate facility fees charged to "telehealth" visits.

  17. Income Verification for Free / Reduced School Meals


    $9 billion in savings


    Would require income verification for free breakfast and lunch for qualifying students.

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