(Bloomberg) — Several Senate Republicans began to question Wednesday whether their health care bill should repeal a tax on high-income Americans imposed by the Affordable Care Act when the legislation would scale back subsidies for the poor.
Susan Collins of Maine and Mike Rounds of South Dakota both criticized the draft Better Care Reconciliation Act bill released by Majority Leader Mitch McConnell for repealing a surtax on net investment income imposed under the Affordable Care Act.
“I do not see a justification for doing away with the 3.8% tax on investment income, because that is not something that increases the cost of health care,” Collins said. “So I distinguish between those tax increases that were part of Obamacare that increase premiums and the cost of health care versus those that do not.”
A third Republican, Bob Corker of Tennessee, expressed discomfort with the idea of cutting Affordable Care Act taxes on the rich while transferring burdens on the poor.
Scaling back the BCRA bill tax cuts could provide a path to winning over key moderate senators who have recoiled at the soaring premiums and deductibles for millions of low-income people as scored by the CBO, and the estimated 22 million fewer people who would have insurance in a decade. Meanwhile, conservatives have pushed to wipe out all of the taxes, though senators like Ted Cruz have not insisted every tax cut remain as part of an overall deal. Conservatives have been focused more on cutting regulations to lower premiums.
Up to now, senators had largely been focused on the bill’s health care effects. But its tax cuts, many of which would benefit the wealthy, are politically sensitive, particularly given statements by President Donald Trump that the GOP health bill shouldn’t be “mean.”
GOP leaders were forced to delay a planned vote on the health bill this week after five Republicans said they would vote against a key procedural motion. Several more Republicans came out against the measure after the delay.
The draft legislation would eliminate a 3.8% tax on net investment income such as capital gains and dividends for people who earn more than $200,000 and couples with incomes over $250,000 — retroactively, effective Dec. 31, 2016. Ending the tax would cost the federal government about $172 billion over a decade, the Congressional Budget Office estimated.
Rounds called for using the savings to expand tax credits for Americans who are currently ineligible for assistance because their spouses have employer plans that don’t cover them. The South Dakota Republican said GOP leaders have told him the proposal would receive a CBO score.
“If we could make a change in that, I really think we could help millions of people,” Rounds told reporters after a Republican lunch discussion. “These are folks who get nothing.”