The House Ways and Means Subcommittee on Select Revenue Measures held a hearing Wednesday on the tax implications of a proposed bill aimed at preventing taxpayer money from being used to fund abortions.

The bill, H.R. 3, the No Taxpayer Funding for Abortion Act, contains several tax provisions although it would not amend the Tax Code.

“H.R. 3 clearly contains tax provisions within the Ways and Means Committee’s jurisdiction,” said subcommittee chairman Pat Tiberi, R-Ohio. “I agree with Chairman [Dave] Camp that it is imperative for the Ways and Means Committee to review—and when necessary mark up—bills containing tax-related provisions that are moving through the legislative process.”

The ranking member on the committee, Richard Neal, D-Mass., voiced skepticism about the bill.
“Because this bill has not been drafted as amendments to the Internal Revenue Code, it is hard to capture its full reach,” he said. “Can a company deduct expenses for research on a better birth-control pill where abortion might be possible as part of the clinical trial?  There are at least a dozen tax provisions potentially impacted by this imprecise language.”

The bill affects the Tax Code by prohibiting certain tax benefits from being used to pay for abortions or for health benefit plans that cover abortions, according to an overview from Thomas A. Barthold, chief of staff of the Joint Committee on Taxation, in his testimony before the committee.

In particular, Section 303 of the bill seeks to prevent abortions from being paid for with federal tax credits or deductions or with funds withdrawn on a tax-preferred basis from certain trusts and accounts.

The bill provides that, for taxable years beginning after the date of enactment, no tax credit would be allowed for the amounts paid or incurred for an abortion, or with respect to the amounts paid or incurred for a health benefits plan (including premium assistance) that includes coverage of abortion.

Amounts paid or incurred for an abortion would not be taken into account for the purposes of determining any tax deductions for expenses paid for the medical care of a taxpayer or the taxpayer’s spouse or dependents; and any amount paid or distributed from certain tax-preferred trusts or accounts for an abortion would have to be included in gross income, according to the proposed bill.

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