As we rapidly approach the inauguration of President-elect Donald Trump, many are speculating on the specifics of how campaign promises will manifest into policy changes. Over the last several weeks we have seen evidence of a President Trump who may be both more moderate and pragmatic than the rhetoric of his campaign suggests. If this trend continues, how might his pragmatism affect the much-ballyhooed changes to the Affordable Care Act? One answer might be found in the confluence of tax reform and ACA repeal and replace.

President-elect Trump has promised that reform of the tax code will be one of his key priorities. While all the specifics have not been published, some key themes are: 1) reduction in the corporate tax rate, 2) provision for the repatriation of foreign earnings without taxation, and 3) reduction in individual tax rates for all. These aggressive tax reductions will be met by resistance by some of the budget “hawks” in the Republican Party. Trump may have to offer some “offsets” to get these aggressive tax reforms through Congress.

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