Lawmakers must act to prevent Obamacare taxes from going into effect next year, 36 conservative groups and activists wrote in a letter addressed to House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.).

Absent Congressional action, the Obamacare health insurance tax and medical device tax will both go into effect in 2018. As the coalition notes, this would be unacceptable and would harm taxpayers across the country:

“Unless Congress acts soon, both tax increases will go into effect on January 1, 2018, leading to higher premiums and higher costs for middle class families, seniors, and small businesses.”

Specifically both taxes directly harm middle class families and small businesses. For example, half of the Obamacare health insurance tax is paid by those earning less than $50,000 a year and it increases premiums by as much as $5,000 per family. Similarly, it is estimated the medical device tax could lead to more than 25,000 lost jobs by 2021.

As such it is imperative that Congress stops these taxes from going into effect next year as soon as possible.

The full letter can be found here and below:

August 10, 2017

The Honorable Paul D. Ryan
Speaker, United States House of Representatives
H-232, The Capitol
Washington, D.C. 20515

The Honorable Mitch McConnell
Majority Leader, United States Senate
S-230, The Capitol
Washington, D.C. 20510

Dear Speaker Ryan & Leader McConnell:

We write to urge you to prevent Obamacare’s tax on Americans’ health insurance and the medical device tax from going into effect in 2018. Unless Congress acts soon, both tax increases will go into effect on January 1, 2018, leading to higher premiums and higher costs for middle class families, seniors, and small businesses.

Ideally, both the health insurance tax and medical device tax should be repealed permanently, as should all one trillion dollars of Obamacare taxes. However, given the recent collapse of healthcare reform legislation, lawmakers should act to delay these two taxes so they do not hit taxpayers in 2018.

Allowing the health insurance tax to go into effect in 2018 will directly hurt middle and low-income families. Half of the tax is paid by those earning less than $50,000 a year and it will increase premiums by $5,000 per family over the next decade according to research by the American Action Forum.

In total, the tax hits 11 million households that purchase through the individual insurance market and 23 million households covered through their jobs. Next year alone, the tax will total $14.3 billion. Over a decade, these taxpayers will pay roughly $150 billion more if the tax is not repealed.

The health insurance tax is also devastating to small businesses. It is estimated to directly impact as many as 1.7 million small businesses. According to the National Federation of Independent Business, the tax could cost up to 286,000 in new jobs and cost small businesses $33 billion in lost sales by 2023.

The 2.3 percent medical device tax is also harmful to small businesses. There are more than 6,500 medical device companies in the U.S., 80 percent of which have fewer than 50 employees. The industry contributes $150 billion annually to the economy. The tax impairs the industry’s ability to innovate, invest, and create jobs.

If Congress allows it to go into effect in 2018, the medical device tax could lead to more than 25,000 lost jobs by 2021. Over the next decade, this excise tax is projected to increase taxes by $30 billion.

Small businesses account for half of all jobs in the U.S. and two-thirds of new jobs in recent decades, so the health insurance tax and medical device tax mean businesses are able to spend less on new workers, higher wages, or new equipment.

Absent full repeal, Congress must use the remaining months of the year to delay the health insurance tax and medical device tax so they do not go into effect in 2018 and increase taxes.

American families, seniors, and businesses have already been hurt by the failure to repeal Obamacare’s taxes. The last thing taxpayers need is even more taxes to go into effect.

Sincerely,

Grover Norquist
President, Americans for Tax Reform

James L. Martin
Founder & Chairman, 60 Plus Association

Leigh Hixon
Senior Director of Policy Relations, Alabama Policy Institute

Lisa B. Nelson
CEO, American Legislative Exchange Council

Ashley N. Varner
Executive Director, ALEC Action

Dan Weber
President, Association of Mature American Citizens

Norm Singleton
President, Campaign for Liberty

Jeff Mazzella
President, Center for Individual Freedom

Chuck Muth
President, Citizen Outreach (Nevada)

Chip Faulkner
Executive Director, Citizens for Limited Taxation Massachusetts

Tom Schatz
President, Council for Citizens Against Government Waste

Katie McAuliffe
Executive Director, Digital Liberty

Richard Watson
Chairman, Florida Center Right Coalition

Annette Meeks
CEO, Freedom Foundation of Minnesota

Adam Brandon
President, FreedomWorks

Grace-Marie Turner
President, Galen Institute

Kelly McCutchen
President, Georgia Public Policy Foundation

Carrie L. Lukas
President, Independent Women’s Forum

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

Jenna A. Robinson, Ph.D.
President, The James G. Martin Center for Academic Renewal

Sal J. Nuzzo
Vice President of Policy, The James Madison Institute (Florida)

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

Mary Adams
Chair, Maine Center-Right Coalition

Pem & Ruth Schaeffer
Maine Conservative Activists

The Honorable Kurt Zellers
Chair, Minnesota Center-Right Coalition

Henry Kriegel
President, Montanans for Tax Reform

Pete Sepp
President, National Taxpayers Union

The Honorable William O’Brien
Former Speaker, New Hampshire House of Representatives
Co-chair, New Hampshire Center Right Coalition

The Honorable Stephen Stepanek
Former Chairman, Hew Hampshire House Ways & Means Committee
Co-chair, New Hampshire Center Right Coalition

Jack Boyle
Chairman, Northeast Ohio Center-Right Coalition

Jeff Kropf
Executive Director, Oregon Capitol Watch Foundation

Charlie Gerow
CEO, Quantum Communications (Pennsylvania)

Mike Stenhouse
CEO, Rhode Island Center for Freedom and Prosperity

Paul J. Gessing
President, Rio Grande Foundation (New Mexico)

Dr. Deane Waldman
Director, Center for Health Care Policy, Texas Public Policy Foundation

David Williams
President, Taxpayers Protection Alliance


MORE ON Fiscal Policy

J. Pepper Bryars: Time to stop daydreaming about a lottery

Lottery supporters were left saying “so close …” last week after the latest attempt to establish the game in Alabama collapsed under the weight of competing interests and power plays. It was reminiscent of the failed lotto player, successfully matching his numbers one-by-one until his hopes are dashed when that final digit proves ever elusive. […]

HUNTSVILLE RADIO: Should we expand Medicaid in Alabama?

API Senior Fellow J. Pepper Bryars and Fred Holland of Huntsville’s WTKI radio discussed Medicaid expansion in Alabama. Would it help? Would it hurt? Why do credible economists predict vastly different outcomes? Listen here:

J. Pepper Bryars: Alabama should wait and watch before considering Medicaid expansion

If only Alabama’s leaders had a magical Medicaid “Choose Your Own Adventure” book, so they could flip ahead and see the different outcomes we could expect by expanding the government insurance program that was originally designed for the poor and disabled. Would it end in a stronger economy, more jobs and a vibrant system of […]

MORE ON Health Care

HUNTSVILLE RADIO: Is there a groundswell of pro-life momentum in Alabama?

API Senior Fellow Rachel Blackmon Bryars and WTKI Radio host Fred Holland talked Friday about Rep. John Rogers’ recent grisly comments about the Alabama Human Life Protection Act and whether or not there is a groundswell of support for ending abortion in Alabama. Listen to the discussion here:

J. Pepper Bryars: Alabama should wait and watch before considering Medicaid expansion

If only Alabama’s leaders had a magical Medicaid “Choose Your Own Adventure” book, so they could flip ahead and see the different outcomes we could expect by expanding the government insurance program that was originally designed for the poor and disabled. Would it end in a stronger economy, more jobs and a vibrant system of […]

MORE ON The Forum

MOBILE RADIO: How does ‘school choice’ = ‘tax choice’ in Alabama?

API Sr. Fellow Rachel Blackmon Bryars appeared on Mobile’s 1410 AM 94.5 FM LA Catholic Morning radio show to discuss how Alabamians can help low-income students who are stuck in low-performing schools by redirecting some of their income tax liability to a program that funds scholarships. It costs nothing but a few minutes and is […]

MOBILE RADIO: An update on Alabama’s pro-life bill

API Senior Fellow Rachel Blackmon Bryars provided an update on Alabama’s landmark abortion bill that is being considered in the state Senate today. Listen to the segment on 1410 AM/94.5 FM WNGL Archangel Catholic Radio:

MORE FROM Taylor Dawson

Three Reasons Why You Should Care About Occupational Licensing Reform

During my years working in public policy, there have been a handful of issues that have gotten me fired up. Typically when I tell people about them, they have some level of understanding—a state lottery, education and school choice, taxes and budgets, things like that. These days, when I’m asked about the issue I most […]

What does freedom mean to me?

When most of us think about the Fourth of July, we think about pool parties, cooking out, fireworks, and spending time with friends and family. Others think about our love for America. Some of us even wait all year for an occasion to wear a t-shirt that has the Declaration of Independence printed on it. […]

API and Yellowhammer News Release 2018 Legislative Candidate Questionnaire

Candidates for public office, once elected, bring their underlying principles and perspectives on policy issues into office with them, thus defining how they govern. It is important for citizens to know and understand the candidates for which they are voting, and Yellowhammer News and the Alabama Policy Institute (API) are partnering to bring that information […]