Health Reform WK-EDGE Senate GOP may forgo certain ACA repeal tax cuts
Monday, July 10, 2017

Senate GOP may forgo certain ACA repeal tax cuts

By Wolters Kluwer News Staff

Senate Republicans continue discussions on their healthcare bill, the Better Care Reconciliation Act of 2017 (BCRA) (H.R. 1628), which would repeal and replace, in part, the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) and related taxes. Senate GOP leadership chose to delay debate and a vote on the bill during the week of June 26 as it became obvious it would not garner enough Republican support to pass. There are reports that an updated draft may be submitted to the Congressional Budget Office (CBO) prior to Congress leaving town for the July 4 holiday recess.

As these talks among lawmakers continue, however, the possibility that certain ACA taxes will remain untouched by the Senate GOP bill is becoming more likely. The measure has received harsh criticism from both Democrats and some Republicans for providing tax cuts to the wealthy while not doing enough to help middle- and lower-income individuals purchase insurance.

Sen. Bob Corker (D-Tenn) has said that he believes the Net Investment Income Tax (NIIT) will not be repealed as a part of the bill. The current BCRA draft would repeal the NIIT, a 3.8-percent tax on net investment income that applies to individuals, estates and trusts that have investment income above certain threshold amounts. "It’s not an acceptable proposition to have a bill that increases the burden on lower-income citizens and lessens the burden on wealthy citizens," Corker said.

Sen. Mike Lee (R-Utah) also stated openly that he would not vote in favor of the bill for similar reasons. "The first draft of the bill included hundreds of billions of dollars in tax cuts for affluent, bailouts for insurance companies, and subsidies for lower income Americans. But it ignored the middle-class families who have borne the brunt of (the ACA)," he said in a statement.

The decision to leave in place additional ACA taxes, however, will likely only fan the flames of growing intraparty disagreement among certain Republicans. Several GOP lawmakers have criticized the measure for not going far enough, wanting a full-repeal of the ACA and associated taxes.

Senate Finance Committee (SFC) Chairman Orrin G. Hatch (R-Utah) has said previously that all ACA taxes must go. "After spending seven years talking about the harm being caused by these taxes, it’s difficult to switch gears now and decide that they’re fine so long as they’re being used to pay for our health care bill," Hatch said earlier this year. Reports are now that he may be bending on that position.

Meanwhile, SFC ranking member Ron Wyden (D-Ore) is questioning any Republican method to remove certain tax cuts for the wealthy as making the remaining portions of the health care bill more acceptable." So, if the plan to slash health care for millions and give tax breaks to the wealthy becomes a two-step process, suddenly it’s A-OK?" he said in a June 29 tweet.

Wyden, nevertheless, said he remains hopeful for a bipartisan approach." If you want to deal with important issues and solve the big challenges in a sustaining way, you have to make it bipartisan." Using the reconciliation process for big issues such as taxes, infrastructure and health care is not sustaining because it does not create an investment for both sides of the aisle, he added.

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