(Bloomberg) — Republican Sen. Bob Corker said Thursday that he expects GOP leaders to scrap a provision in their Better Care Reconciliation Act health bill that would repeal a tax on investment income that affects high-income earners.
The Tennessee Republican said the decision to retain the Affordable Care Act’s 3.8% tax on net investment income, including income from non-qualified annuities, would help Republicans boost subsidies for low-income people in the individual exchanges. Some other Republicans said they were willing to at least consider the idea.
“We are going to figure out a way, I believe, before Friday comes to greatly enhance the ability of lower income citizens to buy insurance on the exchange and at the same time my sense is that the 3.8% is going to go away,” Corker told reporters. “It’s not an acceptable proposition to have a bill that increases the burden on lower-income citizens and lessons the burden on wealthy citizens.”
Corker’s remarks came after several Senate Republicans began to question Wednesday whether the bill should be repealing so many taxes on wealthy Americans when the legislation would scale back subsidies for the poor.
Susan Collins of Maine and Mike Rounds of South Dakota both criticized the draft bill released by Majority Leader Mitch McConnell for repealing the investment surtax.
“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.”
Second-ranking Senate Republican John Cornyn of Texas said the idea of keeping the tax was “being discussed,” and that it’s possible the repeal could be addressed later in a tax-code overhaul. Third-ranking Senate Republican John Thune of South Dakota said, “I don’t think there’s a final decision been made on that.”
Sen. Pat Toomey of Pennsylvania said he’d be “shocked if that tax increase is not repealed.”
“We pledged that we’d repeal Obamacare. I don’t remember anybody going around saying, oh, except for these job-killing tax increases,” Toomey said.
Scaling back the 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.
Rep. Mark Meadows of North Carolina, chairman of the small-government Freedom Caucus, said he is willing to consider keeping the investment tax “if Sen. Corker thinks that that’s important to make sure we get the policy right.” He added, “I’m willing to at least look at it.”
Up to now, senators had largely been focused on the BCRA bill’s health care effects. But the BCRA 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.
Senate Majority Leader Mitch McConnell (Photo: McConnell)