Ways and Means Committee approves tax bill

The House Ways and Means Committee today voted 24 to 16 along party lines to approve the Tax Cuts & Jobs Act (H.R. 1), legislation to reform the tax code. Among other changes, the bill would eliminate hospitals’ ability to access low-cost capital financing through tax-exempt private-activity bonds. In addition, the bill would impose a 20% excise tax on pay for certain hospital employees. The bill would not make changes to tax exemption for not-for-profit hospitals. In the area of changes to the personal tax code, the bill would repeal the itemized deduction of medical expenses beginning next year, and eliminate the deduction for contributions to Archer medical savings accounts. The bill does not make any changes to the Affordable Care Act’s individual mandate or individuals’ ability to itemize deductions for charitable giving. AHA has urged the committee to reject proposals that would eliminate tax-exempt private-activity bonds, and expressed concern about the 20% excise tax for certain hospital employee compensation and deduction for people with high medical costs. The bill now heads to the House floor.