Panel: Repeal of ObamaCare taxes would cost more than $500B

The Joint Committee on Taxation on Tuesday released estimates showing that the repeal and delay of many of ObamaCare’s taxes in the House Republicans' legislation would result in more than $500 billion in lost federal revenue.

The GOP legislation would repeal most of ObamaCare’s taxes, with the notable exception of the "Cadillac tax" on high-cost health plans.

Under current law, the Cadillac tax is set to take effect in 2020, and the bill would delay the Cadillac tax until 2025. The committee, which provides official revenue estimates of tax legislation, estimated that delaying the tax would cost $48.7 billion over 10 years.

Several excise taxes on parts of the healthcare industry would also be repealed.

The committee estimated that over a 10-year period, repealing the 2.3 percent medical-device tax would reduce revenue by $19.6 billion over 10 years, repealing the tax on brand pharmaceutical companies would cost $24.8 billion and repealing the health-insurance tax would cost $144.7 billion. Repealing the 10-percent sales tax on indoor tanning services would cost $600 million.

ADVERTISEMENT
Two of the ObamaCare taxes that would be repealed are targeted at people with high incomes. The committee estimated that repealing ObamaCare’s net investment tax on the wealthy would reduce revenue by $157.6 billion over 10 years, and repealing the Medicare surtax on high earners would reduce revenue by $117.3 billion.

A provision to repeal the $500,000 cap on the deduction health insurance companies can take for an employee’s compensation would lower revenue by $400 million, the panel said.

The committee released revenue estimates of some parts of the GOP legislation, but a full “score” of the legislation remains unavailable.

The independent Congressional Budget Office (CBO) is preparing a thorough accounting of the bill's projected impact.

Some revenue-related parts of the bill, such as repealing the individual and employer mandates and creating new refundable tax credits, will be included in the CBO’s estimates. The CBO score is also expected to include estimates about the number of people who would lose healthcare coverage under the bill.

Many Democratic lawmakers have blasted Republicans for scheduling committee markups of the legislation before the full CBO score is released.

“We don’t even know how large of a negative impact this bill would have yet because Republicans are irresponsibly rushing forward before this bill even receives a score from CBO,” Senate Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerDemocrats will need to explain if they shut government down over illegal immigration White House: Trump remarks didn't derail shutdown talks Schumer defends Durbin after GOP senator questions account of Trump meeting MORE (D-N.Y.) said Tuesday.

The estimates from the committee focus on the provisions that the House Ways and Means Committee will consider Wednesday. The House Energy and Commerce Committee is also slated to mark up their portion of the legislation that day.

Democrats and liberal groups have blasted the House GOP legislation as a tax cut for the wealthy.

“The bill is a winning lottery ticket for wealthy Americans,” Schumer said.

But Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyHouse passes tariff-relief bill GOP may increase IRS’s budget Overnight Finance: Congress barrels toward another shutdown crisis | Canada worries Trump will withdraw from NAFTA | Blue-state Republicans push tax law changes | Chamber CEO calls out Bannon, Warren MORE (R-Texas) on Tuesday defended repealing the ObamaCare taxes.

“I look at the 20,000 jobs that have left America because of the irresponsible, medical-device tax, I look at the health insurance taxes and others that drove up healthcare costs on Americans, especially those who could least afford it,” Brady said.

“You run down tax increase after tax increase after tax increase, they hurt the economy, they hurt healthcare, they achieve nothing,” he said. “I don’t want Americans to continue to struggle under the ObamaCare taxes.” 

In order for the GOP healthcare plan to pass the Senate with a simple majority, it can't increase the deficit after 10 years. Brady said lawmakers would make sure the measure follows that rule.

Updated at 1:39 p.m.