Amendments to the Senate version of the Tax Cuts and Jobs Actwill protect catch-up contributions to 401(k) plans for high-wageearners, and preserve the tax structure for non-qualified deferredcompensation.

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More than 350 amendments were made to the bill late Tuesdaynight. The Senate Finance Committee is pushing to vote on abill by the end of the week.

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The revised bill also delivered two bombshells that immediatelyroiled the already contentious debate over tax reform.

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The Senate bill now repeals the Affordable Care Act’s individualmandate. And it makes revised individual tax brackets and tax cutstemporary, setting the lower rates to expire in 2025.

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“This is a very different bill, colleagues,” said Sen. RonWyden, D-OR, ranking member of the Senate Finance Committee, inopening comments during Wednesday’s mark up hearing.

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“This tax bill is now officially a health care bill,” addedWyden.

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The Congressional Budget Office has already estimated thatinsurance premiums in the individual market will increase 10percent annually due to the individual mandate’s repeal. CBO says 4million will become uninsured in 2019, and 13 million will eitheropt to not buy insurance, or be priced out of the individualmarket, over the 10-year budget window.

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Democrats on the Committee are positioning the premium increasesas tax increases. The Chair of the non-partisan Congressional JointCommittee on Taxation testified that the premium increases wouldeffectively amount to a tax increase on middle-incometaxpayers.

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Republicans are arguing that the individual mandate, and thetaxes paid by those that choose to forego health coverage, islargely shouldered by middle and lower-income taxpayers.

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In 2015, about 6.5 million individuals were taxed for not havinghealth care coverage. The CBO says that 58 percent of those thatpaid the tax penalty made less than $50,000, and one-third madeless than $25,000, noted Sen. John Thune, R-SD.

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Repeal of mandate as a tax reform pay-for

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In repealing the ACA individual mandate, Republicans free upanother $338 billion within the 10-year budget window, according tonumbers from the CBO.

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That covers the $200 billion in debt service costs to the taxreform bill, bringing the total cost of the tax cuts under the $1.5trillion deficit allowed under a budget resolution.

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Under the Senate’s amended bill, cuts to the corporate tax ratewill remain permanent. Cutting the corporate rate to 20 percentaccounts for the costliest measure of the GOP reform bill.

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Individual tax cuts were made temporary in order to accommodatethe Senate’s Byrd rule, which requires that tax reform not add tothe budget deficits outside the 10-year budget window, according totestimony from the JCT Wednesday.

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That fact buoyed the fundamental argument Democrats in bothchambers of Congress have made during he tax reform debate: the GOPis cutting corporate and business rates at the expense of themiddle class.

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“The temporary tax cuts on the individual are what allow thecorporate tax cuts to be permanent,” said Sen. Wyden.

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Republicans on the Senate Finance Committee repeatedly arguedthat repealing the ACA’s individual mandate would amount to a taxbreak for low and middle-income earners.

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Sen. Orin Hatch, R-UT, chair of the Finance Committee, accusedDemocrats of using “scare tactics” over the proposed repeal of themandate.

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“This repeals an extremely regressive tax on low andmiddle-income families,” said Hatch. “Nothing in the modified markimpacts pre-existing conditions or limits on lifetime limits.”

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.