The domestic policy bill Republicans passed in the House this week is full of broad measures that would have visible consequences across the country. Many Americans would see lower taxes, while roughly 10 million could lose access to their health care.
And then there are changes like repealing a pair of $200 taxes on gun silencers.
As tends to happen when Congress takes up a major piece of legislation, Republicans have slipped in a hodgepodge of tweaks that are, at times, only tangentially related to the rest of the bill. Here’s a look at some of those under-the-radar policy provisions, which could change as the legislation moves through the Senate.
A Tax Break for the U.S. Virgin Islands
The United States collects a minimum tax on income that companies earn overseas. Since the creation of that tax in 2017, the U.S. Virgin Islands, a territory, has been treated as a foreign location for the purposes of the tax. The legislation would create a new carve-out for income earned on the islands, a generous change that is expected to result in a loss of $883 million in tax revenue over the next decade.
Lighter Regulation for A.I. Companies
The bill includes substantial benefits for the artificial intelligence industry, home to some of President Trump’s most active supporters, including David Sacks, the venture capitalist who is now the White House’s A.I. czar.
It sets aside hundreds of millions of dollars for the use of A.I. in naval shipbuilding, customs and border protection, Social Security and information technology. It also places a 10-year moratorium on the enforcement of state laws involving the regulation of A.I. models and systems.
Legal Protections for Trump Officials
Republicans tucked a provision into the bill that would limit the power of federal judges to hold people in contempt, potentially shielding Mr. Trump and members of his administration from the consequences of violating court orders.
The House-passed bill would block federal judges from enforcing their contempt citations if they had not ordered a bond. It would apply retroactively to ongoing cases in which federal judges are weighing whether to hold Trump administration officials in contempt over deporting migrants.
A New Break for Investors
One of the most expensive provisions in the bill is a deduction to the owners of “pass-through” businesses. These are companies that, rather than paying corporate taxes, pass their profits to their owners, who then pay individual income taxes on the earnings. The vast majority of businesses in the United States are organized this way.
The legislation not only makes the deduction larger. It also extends it to income from business development companies. These companies, which make risky loans to small and midsize firms, are popular with Wall Street investors. This change would come at a cost of nearly $11 billion over a decade.
That gain for Wall Street comes on top of the preservation of the carried interest loophole, which allows investment managers to qualify for a lower tax rate on some of their income. Mr. Trump had called for Congress to close the loophole, but Republicans have not touched it.
More Generous Terms for Health Savings Accounts
People with health savings accounts could look forward to a new tax-free use of the funds: gym memberships. The bill would allow people to withdraw $500 each year to pay for fitness expenses, though it includes a long list of rules for what type of physical activity would qualify — no sailing or golf, sorry. Married couples could withdraw $1,000 from the tax-preferred accounts.
This is expected to be a $10 billion change.
A Shake-Up to the Tobacco Industry
Another aspect of the bill appears to be a threat to some U.S. tobacco companies — and a boon to their competitors. Right now, tobacco companies can seek refunds on the taxes they pay on exports to other countries. But the new bill would curb those refunds, known as “drawbacks,” creating a threat that some tobacco lobbyists have described as existential.
Industry lobbyists noted that the effects could be sharply felt by R.J. Reynolds, the subdivision of British American Tobacco that receives refunds for its exports to other countries. Luis Pinto, a spokesman for Reynolds, which is based in Winston-Salem, N.C., called the provision “a serious threat to North Carolina’s economy,” adding that the company had “engaged with lawmakers” to convey its concerns.
By contrast, Altria, the former Philip Morris, based in Richmond, Va., primarily does business in the United States. The company supports the refunds change, a spokeswoman said.
Michael Gold contributed reporting.
Andrew Duehren covers tax policy for The Times from Washington.
Kate Kelly covers money, policy and influence for The Times.
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