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Senate GOP abandons two tax cuts for big earners

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A revised draft of the Better Care Reconciliation Act (BCRA) sent to the Congressional Budget Office (CBO) shows that the Senate Republicans have abandoned the repeal of two tax cuts aimed at high earners.

According to the new draft, the Republicans have decided to retain ObamaCare’s 3.8-percent investment tax as well as the 0.9-percent Medicare surtax on single individuals who earn more than $200,000 and on couples whose income exceeds $250,000. Jointly, these two taxes are expected to raise some $231 billion over a 10-year period. A portion of this revenue could be used to pay for the expansion of the Medicaid program for the poor.

However, the revised version of the draft being examined by the CBO indicates that the Senate GOP is still planning to go ahead with the repeal of the Affordable Care Act (ACA) mandate which compels employers to pay for their employees’ – as well as their dependents’ – health insurance. As the mandate kicks in when the workforce exceeds 50 full-time employees, many small businesses cannot afford the additional expense.

Commenting on a number of tax repeals still contained in the latest revised draft, Sen. John Barrasso (R-WY) emphasized that these would drive down the cost of health insurance.

“The taxes that will be repealed are all the taxes that have been driving up the cost of insurance,” the number-four Senate Republican said.

But Sen. Lindsey Graham (R-S.C) warned on Tuesday that he would be releasing his very own healthcare bill and rejected the current proposals contained in the BCRA.

“I want to do the best I can. And I think the best we can is not on the table right now,” the South Carolina senator said.

Republican leaders have indicated that they are determined to get a vote on the bill by the mid-August recess. On Tuesday, Senate Majority Leader Mitch McConnell took the decision to postpone the start of the August recess and explained that the first two weeks of August would be dedicated to “important legislative issues.” He also said that he planned to release the revised health care bill on Thursday morning at the latest.

For the bill to pass, the Senate GOP can only afford to lose two Republican votes as none of the Senate Democrats is expected to cross the aisle to support the BCRA.

Should the Senate pass the bill in the first two weeks of August, House representatives could be asked to come back to Washington for an early vote.

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