Promoting freedom, innovation, and growth

Connect with IPI

Receive news, research, and updates

June 13, 2017

47 Conservative Groups and Activists: The Senate Should Repeal All Obamacare Taxes

 

June 13, 2017

The Honorable Orrin G. Hatch
Chairman, Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Hatch:

As the Senate continues to make progress on legislation to repeal and replace Obamacare, we urge you and your colleagues to include repeal of the nearly 20 taxes imposed by the law.

During a February 1 speech at the Chamber of Commerce, you declared, "All of the ObamaCare taxes need to go as part of the repeal process."

We agree.

Recent media reports suggest that the Senate may be wavering on repeal of these taxes. This would be a mistake. The final Senate repeal package should retain the broad tax relief that was included in the House passed American Health Care Act.

The roughly one trillion dollars in new or higher taxes imposed by Obamacare directly hit middle class families and small businesses, raise the cost of healthcare, and reduce access to care.

Obamacare taxes directly suppress economic growth. The best example of this is the 3.8 percent so-called Net Investment Income Investment Tax (NIIT) on capital gains and dividends. Historically, capital gains taxes have a significant negative impact on capital formation, productivity, and economic growth while raising little or even negative revenue.

Repealing the 3.8 percent NIIT would return the capital gains tax rate to 20 percent, the rate agreed to by President Clinton and a Republican Congress in 1997.

A related tax hike is the 0.9 percent Medicare surtax on wages and self-employment income, the repeal of which was unfortunately delayed six years by an amendment in the House. It should be repealed as expeditiously as possible.

Other Obamacare taxes directly impact the ability of Americans to meet healthcare costs, such as the income tax hike on families with high medical bills. Around 10 million families pay $200 to $400 in higher income taxes each year because Obamacare increases the threshold at which families can deduct medical expenses paid out of pocket.

Obamacare also makes it harder for individuals to save for their own healthcare choices. Roughly 20 million Americans use tax-advantaged Health Savings Accounts (HSAs) to save for healthcare costs. Another 30 million use Flexible Spending Accounts. There are multiple taxes that restrict the ability of families to use these savings accounts, which limits the choice of consumers.

Other taxes hit certain healthcare industries, such as insurance providers, medical device and prescription drug manufacturers. Inevitably, these taxes are passed onto American families in the form of increased costs.

Finally, the tax associated with the employer mandate has limited millions of Americans to part-time work and the tax penalty associated with the individual mandate hit eight million Americans in 2014, with a family of four facing an income tax hike exceeding $2,000.

True repeal of Obamacare means repealing the Obamacare taxes and the Senate should resist the urge to deprive taxpayers of relief in order to pay for higher spending.

We commend you on your stance to repeal these Obamacare taxes and urge any final package accelerate or at least maintain the House-passed tax reductions.

Sincerely,

Grover Norquist
President, Americans for Tax Reform 

James L. Martin
Founder/Chairman, 60 Plus Association 

Phil Kerpen
President, American Commitment 

Steve Pociask
President, American Consumer Institute 

Lisa B. Nelson
CEO, American Legislative Exchange Council 

Ashley N. Varner
Executive Director, ALEC Action 

Dan Weber
President, Association of Mature American Citizens (AMAC) 

Lindsay Boyd
Policy Director, Beacon Center of Tennessee 

Norm Singleton
President, Campaign for Liberty 

Andrew F. Quinlan
President, Center for Freedom and Prosperity 

Jeff Mazzella
President, Center for Individual Freedom 

Chuck Muth
President, Citizen Outreach (Nevada) 

Twila Brase, RN, PHN
President and Co-founder, Citizens' Council for Health Freedom 

Chip Faulkner
Executive Director, Citizens for Limited Taxation (Massachusetts) 

David McIntosh
President, Club for Growth 

Michael J. Bowen
CEO, Coalition for a Strong America 

Thomas Schatz
President, Council for Citizens Against Government Waste 

Katie McAuliffe
Executive Director, Digital Liberty 

Adam Brandon
President, FreedomWorks 

Richard Watson
Chairman, Florida Center-Right Coalition 

Annette Meeks
CEO, Freedom Foundation of Minnesota 

George Landrith
President, Frontiers of Freedom 

Grace-Marie Turner
President, Galen Institute* 

Mario H. Lopez
President, Hispanic Leadership Fund 

Joseph Bast
President and CEO, The Heartland Institute 

Heather R. Higgins
President and CEO, Independent Women's Voice 

Donald P. Racheter, Ph.D.
Chair, Iowa Center-Right Coalition 

Tom Giovanetti
President, Institute for Policy Innovation 

Ryan Ellis
IRS Enrolled Agent 

Seton Motley
President, Less Government 

Colin A. Hanna
President, Let Freedom Ring 

Stephen Waguespack
President and CEO, Louisiana Association of Business and Industry 

Brett Healy
President, The MacIver Institute (Wisconsin) 

Mary Adams
Chair, Maine Center-Right Coalition 

Bryan Dench
Maine Conservative Activist 

Tim Jones
Former Speaker, Missouri House of Representatives 

Brian McClung
Chair, Minnesota Center-Right Coalition 

Devon Herrick Ph.D.
Senior Fellow, National Center for Policy Analysis 

Brandon Arnold
Executive Vice President, National Taxpayers Union 

Jeff Kropf
Executive Director, Oregon Capitol Watch Foundation 

Jordan Harris and Josh Crawford
Co-Executive Directors, the Pegasus Institute (Kentucky) 

Mike Stenhouse
Founder and CEO, Rhode Island Center for Freedom and Prosperity 

Karen Kerrigan
President and CEO, Small Business and Entrepreneurship Council 

David Williams
President, Taxpayers Protection Alliance 

Michael W. Thompson
President , Thomas Jefferson Institute for Public Policy 

Nancy Piotter
Executive Director, Virginians for Quality Healthcare 

Gerrye Johnston
Founder/CEO, Women for Democracy in America, Inc. 


 

  • TaxBytes-New

Copyright Institute for Policy Innovation 2017. All Rights Reserved Privacy Policy Contact IPI.

e-resources e-resources