Sen. Tom CottonTom Bryant CottonHillicon Valley — Presented by Xerox — Tech groups take aim at Texas Republican lawmakers raise security, privacy concerns over Huawei cloud services Debt ceiling fight pits corporate America against Republicans MORE (R-Ark.) suggested Sunday that a repeal of ObamaCare's individual mandate be included in tax-reform legislation.
"Repealing mandate is itself a tax cut for working families!" Cotton tweeted Sunday.
I have a modest proposal for the soon-to-be-released tax legislation: repeal Obamacare's individual mandate. Why? Let me explain... 1/?— Tom Cotton (@TomCottonAR) October 29, 2017
Cotton cited an analysis from the Congressional Budget Office that concluded repealing the mandate could save $300 billion over 10 years.
"$300 billion pays for a lot lower tax rates for families & businesses, much better than repealing popular, widespread deductions," he tweeted, referring to the GOP's proposals to eliminate a number of deductions through tax reform.
"Both House & Senate have voted to repeal O'care individual mandate. Should be easy vote as part of tax-cut package."
He added: "Repealing mandate doesn't take a penny from O'care spending on Medicaid or exchanges. Just stops IRS from fining people! And repealing mandate is biggest step we could take for now to repeal O'care as we promised. Americans expect us to act!"
The individual mandate — ObamaCare's requirement that everyone have insurance or pay a fine — is one of the most unpopular components of the health-care law.
But experts have said repealing the mandate without replacing it with another method of encouraging people to buy insurance could destabilize the markets.
That's because healthy, younger people who may only buy insurance to avoid paying a fine may drop it if the mandate is repealed, leaving costs to be shared among a sicker, older pool.
The IRS has made clear that it was going to step up enforcing the penalty for tax year 2017.
The agency issued a statement on its website saying it will automatically reject electronic returns that don’t specify if the taxpayer had health insurance.
The penalty for not having insurance is written into law and enforced by the IRS, which means that only Congress has the power to repeal it.
But including a repeal of the mandate could potentially jeopardize a tax reform proposal.
Republicans have a small majority in the Senate and can't afford to lose more than two votes and still get tax reform through.
Leaders have been reluctant to include health-care provisions in tax reform, saying they'll return to ObamaCare repair next year.