In a quest for more revenue sources, Senate Republicans are considering leaving in place a tax on wealthy Americans after initially including its repeal in their legislation to overhaul the U.S. health insurance system.
The GOP is also discussing holding off on the repeal of other taxes included in the 2010 health law, one Republican lawmaker and lobbyists say. Such a move would free up additional funding that could then be allocated toward reducing health care costs for lower-income Americans, lawmakers say.
But the removal of the so-called net investment 3.8 percent tax on capital gains, interest and dividends on the wealthy is opposed by some key members of the conference and House leaders. Removing that provision, however, would undercut a major argument used by Democrats in opposing the legislation.
The discussion around the law’s taxes is just one change under consideration as Republican leadership tries to achieve a quick consensus on an updated bill before lawmakers leave for the Fourth of July recess.
“I don’t think you can have a bill that hurts lower income citizens more and relieves taxes for the wealthy; that’s not sustainable, cannot happen, and Republican leadership knows that and it’s going to be addressed,” Sen. Bob Corker, R-Tenn., told reporters on Thursday. “We are going to figure out a way, I believe, before Friday comes, to greatly enhance the ability of lower-income citizens to buy health insurance on the exchange that actually covers them, not with huge deductibles.”
Corker said his sense was the tax was “going to go away.” That would likely have the support of some other members of the GOP conference, like Sen. Susan Collins of Maine, who are so far opposed to the current version of the bill.
“I understand that some of the tax cuts do contribute to increasing the cost of health care,” Collins said on Wednesday. “I do not see a justification for doing away with the 3.8 percent tax on investment income because that is not something that increases the cost of health care.”
Some Republicans, however, want to see all of the taxes imposed by the health law removed in their entirety. Aside from the investment tax, the law also imposed an excise tax on medical devices and a tax on health insurers, among others.
“I’m the one that said put all of the tax repeals in there, we are not going to pick and choose because there is an amendment process that people can pick and choose,” Senate Budget Chairman Michael B. Enzi of Wyoming told Roll Call.
Enzi’s opposition is notable. The budget panel has been a key adviser to Senate Majority Leader Mitch McConnell as he attempts to craft a bill that can comply with the rules governing the fast track budget procedure known as reconciliation that the GOP is using to advance the legislation.
One Republican lawmaker, speaking on background to discuss internal discussions, said the conference is also considering delaying the repeal of several other taxes in the health law as a way to free up additional money.
Lobbyists say the industry taxes, like the device tax, would likely still be repealed. And such a move would also face steep opposition from some Republican members.
“It’s a tax increase. I think we’re paying enough taxes in this country. I think we’ve got to draw back on some of these things,” Senate Finance Chairman Orrin G. Hatch of Utah said.
House leaders are also still adamant that any bill to overhaul the current U.S. health care system also do away with the taxes imposed by the law.
“I’m looking forward to the Senate removing all of those taxes from our economy,” House Ways and Means Chairman Kevin Brady of Texas said on Thursday.
The current draft of the Senate bill, as well as the House bill that passed the chamber last month, would both repeal the majority of the health law’s taxes, though the repeals in the Senate version would not take effect until 2018.
Lindsey McPherson and Andrew Siddons contributed to this report.