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Taxed And Ticked: Republicans Respond To ObamaCare Tax

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Taxed And Ticked: Republicans Respond To ObamaCare Tax

Conservative groups may bail on their support of the healthcare bill because of the talk about keeping an ObamaCare tax on investment income in the legislation. Conservatives are warning GOP senators not to maintain the present 3.8% net investment income tax (NIIT) in the bill to help pay for more generous subsidies for low-income people. Democrats have criticized the GOP’s bill for eliminating the tax because it almost always just applies to high-income people. ObamaCare’s net investment income tax applies to individuals making more than $200,000 and married couples making more than $250,000.
Prominent conservatives argue that Democrats will find something to criticize regardless of what is in the bill, and they say the tax is harmful to economic growth. “This tax, just like any tax increase, is an anathema to conservatives as it suppresses economic growth and opportunity throughout our nation,” Club for Growth President David McIntosh said in a statement Wednesday. “Under no circumstances should the NIIT be included in any forthcoming Republican ‘repeal’ bill.”
Republicans have a history of disliking the investment tax, but they just do not have enough votes to pass their present legislations. Several GOP senators have suggested that they would be open to keeping the NIIT to bolster the healthcare subsidies. “We [want to] address the issue of ensuring lower-income citizens are in a position to buy plans that actually provide them appropriate healthcare,” Sen. Bob Corker (R-Tenn.) said.
It’s the outside conservative groups that are pushing back. More than 40 free market groups and activists wrote a letter to the Senate Finance Committee Chairman, Orrin Hatch (R-Utah), urging lawmakers to repeal all of ObamaCare’s taxes. They are now troubled by the talk to keep any tax. Taxpayers Protection Alliance President David Williams said that failing to repeal the investment tax would cause investors to delay selling assets and would “discourage more entry into the stock market.”
The message that Democrats are delivering that focuses on lower income people’s needs seem to be resonating with the public. Polls have found that more people oppose the Senate’s draft bill than support it. But Republicans don’t want to give in on this issue in the healthcare debate because it will affect the debate significantly on tax reform. “Democrats will pocket the concession and continue demagoguing tax cuts for the wealthy as the tax debate begins — only more emboldened for having tasted blood,” the Wall Street Journal’s editorial board wrote.
Keeping the NIIT is not a deal-breaker for some GOP lawmakers caught in the mire of getting a bill passed. “Our official position is we want to repeal all the taxes. That being said, we understand the logistics of having to have enough revenue,” House Freedom Caucus Chairman Mark Meadows (R-N.C.) said. “And so I’m not at this point closing that off to negotiations because I think it would be premature to do that.” Sen. Ron Johnson (R-Wis.) told his constituents in a telephone town hall last week that he’s “personally not opposed” to keeping ObamaCare taxes to pay for health benefits.
Do you think this particular tax will make its way into the final GOP bill? Do you think it will lead to greater taxation when tax reform is debated?
Credit: The Hill

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