But now Republicans will have to look elsewhere for money to meet their top targets: bringing the corporate tax rate down to 20 percent from 35 percent, cutting the top individual tax rate to 33 percent from 39.6 percent, and generous new writeoffs for business investments.
“We’re going to analyze the complete impacts here. But clearly it makes a big challenge even more challenging,” said House Ways and Means Chairman Kevin Brady (R-Texas).
Even if the Republican health care plan had succeeded, tax reform wasn’t going to be easy. The House, Senate and businesses are already clashing over key elements of a House GOP plan, notably a provision known as “border adjustability” that would tax imports but not exports.
Ultimately the issue centers on House Republicans’ desire to pass a tax overhaul that would raise the same amount of money as the current tax code. Eliminating taxes tied to the Affordable Care Act would have made reform cheaper by pulling down the budget baseline of how much money was expected to come in to the federal government.