Senate Republicans indicated on Tuesday that their version of the American Health Care Act (AHCA) could leave Obamacare taxes in place, in a break from both the House bill and President Donald Trump’s stated health care priorities.
In April, Trump said it would be easier to pass tax reform if the health care bill passed first, in part because of the taxes on the wealthy included in Obamacare.
“Now, if it doesn’t happen fast enough, I’ll start the taxes. But the tax reform and the tax cuts are better if I can do health care first,” Trump told Fox Business. “ … If you don’t do that you can’t put any of the savings into the tax cuts and the tax reform.”
The AHCA includes a 0.9 percent Medicaid surcharge for top earners, while getting rid of Obamacare taxes on wealthier people and insurers. The first CBO score on AHCA found that it would reduce revenues by $592 billion over the 2017–2026 period thanks to the repeal of Obamacare taxes. In January, a report from the liberal Economic Policy Institute found that repealing these taxes would slow economic growth.
But Republican senators say they are either undecided on repealing the taxes or fully support keeping at least some of the them. Senate finance committee chairman Orrin Hatch (R-UT) told Bloomberg, “That’s hard to say right now. We just have to see.”
Sen. Bill Cassidy (R-LA) has also mentioned the possibility of keeping taxes on high-income earners.
Sen. Susan Collins (R-ME), who is considered a swing vote on this bill, said that although she believes a tax on durable medical goods should be repealed, she wants to keep others in place, according to The Hill.
“ We cannot take away all of the sources of funding for the [Affordable Care Act] and expect to be able to come up with a bill that’s going to provide the kind of coverage that we would like to see,” Collins told reporters.
Collins’ support is critical to the bill’s passage. Republicans can’t afford to lose more than two votes.
If Senate Republicans decide to keep some of the Obamacare taxes, it will be a huge departure. In 2015, Senate Majority Leader Mitch McConnell (R-KY) said, “And whether government bureaucrats deem your coverage too generous or not generous enough, Obamacare has a tax for you.” And only a few months ago, Sen. Hatch called the tax provisions in Obamacare “poorly conceived and recklessly enacted, and they are harmful to our economy.”