The revised Senate health care bill is likely to keep both of the Obamacare taxes levied on wealthy Americans.
The bill, scheduled to be released as early as July 20, is expected to include the 0.9 percent payroll tax and the 3.8 percent tax on net investment income levied under Obamacare on high-income Americans, The Wall Street Journal reports. The taxes apply to a small percentage of the U.S. population — only those making above $200,000 a year or married couples making over $250,000.
While including the move probably isn’t going to play well the constituents of Republican senators, it will serve a few key goals.
First, it gives the system some sort of revenue — expected to be around $230 billion over the ten-year horizon — which Republican leadership could use to as they see fit to spend on health care.
Another potential boon to the Republican repeal effort is that including the taxes, at least in the short run, works to stymie the arguments pushed by Obamacare supporters that the Senate health bill is nothing more than a tax break for the wealthiest Americans. Look no further than CNN’s headline from June 26, “Senate Health Care Bill Gives $250,000 Gift To The Mega-Rich,” to see evidence of that narrative.
There are also some tangible losses for all American consumers if the taxes are kept, according to analysis from the Tax Foundation. The Tax Foundation estimates that repealing the net investment income tax alone would raise employment by 133,000 jobs and allow for wages to be around 0.6 percent larger.
The House bill, which passed in early May, included a retroactive repeal of the investment tax, but a more gradual, seven-year repeal of the payroll tax.
Senate Majority Leader Mitch McConnell delayed the vote on the Senate health care bill, announcing he would push it back until after the July 4 recess. McConnell announced Tuesday afternoon that the Senate would cut its month-long August recess by 2 weeks in order to come to some sort of consensus and pass a piece of legislation.
Ten Republican senators have come out against the previous version put forth in the Senate to repeal Obamacare, including Sens. Rob Portman of Ohio, Dean Heller of Nevada and John Hoeven of North Dakota.
Keeping the taxes could help Senate leadership and the Party avoid a politically tumultuous situation. Some Republicans, however, like Sen. Pat Toomey of Pennsylvania, have previously expressed their support for repealing all Obamacare taxes completely.
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