Latest US Senate tax plan targets familiar foe

US Senate Republicans have included a repeal of the Obamacare individual mandate in their tax overhaul, adding a new twist to the ambitious legislation before the House votes on its own version Thursday.

President Donald Trump is expected to visit Congress on Thursday to rally rank-and-file Republicans to the cause just ahead of the chamber's vote.

But the late Obamacare-related addition to the Senate plan threatens to complicate an already controversial tax proposal.

Members of Trump's party want to take yet another stab at crippling the Obamacare health law, something they have failed to achieve despite multiple attempts this year.

By sliding the repeal of the rule that requires individuals to have health insurance or pay a fine into a successful tax bill, Republicans could claim a major double victory.

But the effort is fraught with severe political risk. With Democrats broadly backing Obamacare, the mandate repeal effort all but assures that tax reform will not be bipartisan.

And should the effort collapse, Republicans could limp into the new year without a major legislative achievement since Trump took office.

Even without the Senate's Obamacare element, the tax bills were different in some key elements.

While the House version permanently cuts the corporate tax rate from 35 percent to 20 percent, effective in 2018, the Senate's would delay that cut by a year.

The House version also maintains the nation's top tax bracket for the wealthiest individuals at 39.6 percent, while the Senate bill lowers the top tier to 38.5 percent.

Senate rules allow for the measure to add $1.5 trillion to the deficit over 10 years. But with the cuts expected to cost far more, tax-writers have scrambled to find other ways to boost revenue and cut spending to cover the costs.

Senate Majority Leader Mitch McConnell has stressed he is optimistic that inserting the mandate repeal into the tax bill will help get it across the finish line.

"The goal is to repeal an unpopular tax from an unworkable law in order to provide more tax relief to middle-class families," McConnell said on the Senate floor.

Obamacare's individual mandate pushes young and healthy Americans to sign up for health insurance and pay into the system, in part to help offset costs of treating patients with poorer health.

It is among the least popular elements of Obamacare, and has been targeted by Republicans.

The fine for shunning health insurance in 2017 is 2.5 percent of a household's annual income, or $695, whichever is greater.

While some Republican swing votes like Senator John McCain are open to the individual mandate repeal in the tax bill, others remained skeptical.

"My concern is that if we combine the health care issues with tax reform, we make it far more controversial," Senator Susan Collins, who opposed her party's Obamacare repeal and replace legislation in September, told US media.

Source: AFP