Trump May Have Lost Millions in Tax Breaks Thanks to a GOP Health Bill Tweak
Although the GOP plan to repeal and replace the Affordable Care Act has been wildly unpopular, earning a 17% approval rate as of late June, according to NPR, the White House has been urging Congress to move quickly on it. But it’s arguably no longer as attractive personally for one key White House occupant. As originally written, the repeal plan would have given President Trump a personal tax cut of up to $2.8 million annually, but the tax changes embedded in that version have been taken off the table, at least for now.
The Senate was considering repealing a key part of the Affordable Care Act (ACA), known as the Net Investment Income Tax, which subsidized part of the ACA’s coverage expansions. The NIIT, a 3.8% tax on net investment income for individuals with income above $200,000 and couples jointly filing taxes with income over $250,000, targeted taxpayers with high proportions of unearned, passive income.
The House version of the health bill eliminated the NIIT. But Senate Majority Leader Mitch McConnell now seems intent on leaving the tax provision in place in order to secure more votes from moderates in his own party.
A study by the Americans for Tax Fairness first reported that repealing the provision would have meant a large tax cut for President Trump. Trump, who earns an annual income between $38 million and $74 million, according to his public financial disclosure form filed with the U.S. Office of Government Ethics, easily falls into the category of individuals subject to the NIIT. The Americans for Tax Fairness applied the 3.8% tax to his estimated annual income to calculate that the president would receive a tax cut between $1.4 million and $2.8 million annually if the repeal managed to be approved by the Senate.