Last-Ditch Repeal Plan Would Keep Obamacare’s Biggest Taxes

Trump Said to Back Graham-Cassidy Health Care Bill

Senate Republican leaders’ renewed Obamacare repeal-and-replace effort -- in the form of the bill authored by senators Lindsey Graham and Bill Cassidy -- maintains the largest tax hikes imposed by the 2010 law, using them to fund block grants to states.

The new repeal bill would keep levies on top earners -- a 3.8 percent tax on net investment income and a 0.9 percent Medicare surtax for individuals earning more than $200,000 or couples above $250,000. It would also preserve a tax on health insurers. Each of those levies would raise more than $100 billion in revenue over a decade, according to the nonpartisan Congressional Budget Office.

What’s in Last Republican Shot to Kill Obamacare

But the bill would repeal three smaller taxes: a 2.3 percent sales tax on medical devices, a tax on over-the-counter medication and levies on contributions to health savings accounts.

Whether to repeal the taxes enacted to fund the Affordable Care Act -- more commonly known as Obamacare -- as part of health-care or tax legislation has been a divisive issue for the GOP. Orrin Hatch, chairman of the tax-writing Senate Finance Committee, said in February that “all of the Obamacare taxes need to go as part of the repeal process,” arguing that it would be “difficult to switch gears now and decide that they’re fine so long as they’re being used to pay for our health-care bill.”

Most Senate Republicans are still trying to figure out what’s in the Graham-Cassidy bill. Hatch said on Monday the legislation would get a Sept. 25 hearing. The window to pass it with a simple majority under Senate rules expires on Sept. 30; Republicans have 52 members in the chamber.

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