List of Obamacare Taxes Repealed in Senate Health Bill

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Posted by John Kartch on Thursday, July 13th, 2017, 5:01 PM PERMALINK


[Click here for a printable version of this list.]

The new Senate health bill abolishes the following Obamacare taxes:

  • Abolishes the Obamacare Individual Mandate Tax which hits 8 million Americans each year. 
  • Abolishes the Obamacare Employer Mandate Tax. 
  • Abolishes Obamacare’s Medicine Cabinet Tax, which hits 20 million Americans with Health Savings Accounts and 30 million Americans with Flexible Spending Accounts. This is a $5.6 billion tax cut.
  • Abolishes Obamacare’s Flexible Spending Account tax on 30 million Americans. This is an $18.6 billion tax cut.
  • Abolishes Obamacare’s Chronic Care Tax on 10 million Americans with high out of pocket medical expenses. This is a $36 billion tax cut.
  • Abolishes the Obamacare health insurance tax. This is a $144.7 billion tax cut.
  • Abolishes the Obamacare medical device tax. This is a $19.6 billion tax cut.
  • Abolishes the Obamacare tax on prescription medicine. This is a $25.7 billion tax cut.
  • Abolishes the Obamacare tax on Medicare Part D retiree prescription drug coverage. This is a $1.8 billion tax cut.
  • Abolishes Obamacare’s HSA withdrawal tax. This is a $100 million tax cut.
  • Abolishes Obamacare’s 10% excise tax on small businesses with indoor tanning services. This is a $600 million tax cut.
  • The Senate bill also delays (until 2026) the “Cadillac” tax on employer-provided insurance. This saves taxpayers $66 billion over the next ten years.
  • The Senate bill also doubles the maximum HSA contribution from $3,400 to $6,550 for individuals and from $6,750 to $13,100 for families. According to CBO, this saves taxpayers $18.6 billion.
  • The Senate bill also allows Americans to use Health Savings Account funds to pay for health insurance premiums. The option to use HSA funds, which are pre-tax, for insurance premiums will provide significant tax relief to millions of households. The CBO has not yet released a score for this tax cut. It is set to go into effect in 2018.


Reminder: President Obama had promised repeatedly that he would not raise any form of tax on any American earning less than $250,000 per year, but he broke the promise when he signed Obamacare. Passage of the Senate’s Better Care Reconciliation Act means tens of millions of middle income Americans will get tax relief from Obamacare's long list of tax hikes.

Here is a more detailed list of the Obamacare taxes abolished in the Senate bill:

REPEALED: Obamacare Individual Mandate Tax and Employer Mandate Tax: Under Obamacare, anyone not buying “qualifying” health insurance – as defined by the Obama-era Department of Health and Human Services -- must pay a steep tax to the IRS. In 2015, eight million households paid this tax. Most Americans stuck with this tax are from low and middle income households. The IRS uses the Orwellian phrase “shared responsibility payment” to describe this tax.

This tax is a minimum of $695 for individuals, while families of four have to pay a minimum of $2,085. Americans pay these amounts or 2.5% of their AGI, whichever is higher. The Senate health bill repeals this tax and the employer mandate tax.

REPEALED: Obamacare Medicine Cabinet Tax on HSAs and FSAs: Under Obamacare, the 20.2 million Americans with a Health Savings Account and the 30 million covered by a Flexible Spending Account are no longer able to purchase over-the-counter medicines using these pre-tax account funds. Examples include cold, cough, and flu medicine, menstrual cramp relief medication, allergy medicines, and dozens of other common medicine cabinet health items. The Senate health bill will abolish this tax, saving Americans $5.6 billion over the next ten years.

REPEALED: Obamacare Flexible Spending Account Tax: Under Obamacare, the 30 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face an Obamacare-imposed cap of $2,500. The Senate health bill will abolish this tax, saving Americans $18.6 billion over the next ten years.

Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap. Now, parents looking to sock away extra money to pay for braces find themselves quickly hitting this new cap, meaning they have to pony up some or all of the cost with after-tax dollars. Needless to say, this tax especially impacts middle class families.

There is one group of FSA owners for whom this new cap is particularly cruel and onerous: parents of special needs children. Families with special needs children often use FSAs to pay for special needs education. Tuition rates at special needs schools can run thousands of dollars per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax increase limits the options available to these families.

According to the U.S. Census Bureau, there are 2.8 million special needs children nationwide. As noted by the Neurological and Physical Abilitation Center, this Obamacare tax "will especially hurt parents of special needs kids because many use FSAs to pay for special needs education."

REPEALED: Obamacare Chronic Care Tax: Under Obamacare, this income tax increase directly targets middle class Americans with high medical bills. The tax hits 10 million households every year. Before Obamacare, Americans facing high medical expenses were allowed an income tax deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI). Obamacare now imposes a threshold of 10 percent of AGI. Therefore, Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income.

According to the IRS, approximately 10 million families took advantage of this tax deduction each year before Obamacare. Almost all were middle class: The average taxpayer claiming this deduction earned just over $53,000 annually in 2010. ATR estimates that the average income tax increase for the average family hit with this Obamacare tax is $200 - $400 per year.

The Senate health bill will abolish this tax, saving Americans $36 billion over the next ten years.

REPEALED: Obamacare HSA Withdrawal Tax Hike: Under Obamacare, this provision increases the tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. The Senate health bill will abolish this tax, saving Americans $100 million over the next ten years.

REPEALED: Obamacare Ten Percent Excise Tax on Indoor Tanning: The Obamacare 10 percent tanning tax has wiped out thousands of small businesses, many owned by women. This Obamacare tax increase was the first to go into effect (July 2010). This petty, burdensome, nanny-state tax hits both the business owner and the consumer. Industry estimates show that 30 million Americans visit an indoor tanning facility in a given year, and over 50 percent of salon owners are women. 

The ten percent tax is steep and its complexity is especially burdensome to employers. Adding insult to injury, the Obama IRS didn't bother to provide compliance guidelines after three quarterly tax payment deadlines had passed. The Obama IRS was called out by the Treasury Inspector General, who wrote: "By the time [IRS] notices were issued, tanning excise tax returns had been due for three quarters. Late filing of these returns would result in the taxpayer owing the unpaid tax, plus interest and penalties."

The Senate health bill will abolish this tax, saving Americans $600 million over the next ten years.

REPEALED: Obamacare Health Insurance Tax: In addition to mandating the purchase of health insurance through the individual mandate tax, Obamacare directly increases the cost of insurance through the health insurance tax.

The total revenue this tax collects is set annually by Treasury and is then divided amongst insurers relative to the premiums they collect each year. While it is directly levied on the industry, the costs of the health insurance tax are inevitably passed on to small businesses that provide healthcare to their employees, middle class families through higher premiums, seniors who purchase Medicare advantage coverage, and the poor who rely on Medicaid managed care.

According to American Action Forum, the Obamacare health insurance tax will increase premiums by up to $5,000 over a decade and will directly impact 1.7 million small businesses, 11 million households that purchase through the individual insurance market and 23 million households covered through their jobs. The tax is also economically destructive – the National Federation for Independent Businesses estimates the tax could cost up to 286,000 in new jobs and cost small businesses $33 billion in lost sales by 2023.

The Senate health bill will abolish this tax, saving Americans $144.7 billion over the next ten years.

REPEALED: Obamacare Tax on Medical Device Manufacturers: Under Obamacare, this law imposes a new 2.3% excise tax on all sales of medical devices. The tax applies even if the company has no profits in a given year. The Senate health bill will abolish this tax, saving Americans $19.6 billion over the next ten years.

REPEALED: Obamacare Tax on Prescription Medicine: Obamacare imposed a tax on the producers of prescription medicine based on relative share of sales. The Senate health bill will abolish this tax, saving Americans $25.7 billion over the next ten years.

REPEALED: Obamacare Elimination of Deduction for Medicare Part D Retiree Prescription Drug Coverage: The Senate health bill will abolish this tax, saving Americans $1.8 billion over the next ten years.

Also of note:

The Senate health bill doubles the annual contribution limit for HSAs, raising the maximum contribution from $3,400 to $6,550 for individuals and from $6,750 to $13,100 for families. Under this law, taxpayers will be able to set aside more of their income as pre-tax savings. The CBO estimates this provision will save taxpayers $18.6 billion over the next ten years.

The Senate health bill expands HSAs so that Americans can use these pre-tax funds to pay for insurance premiums. The CBO has no yet released a score for this tax cut.

Click here for a printable version of this list.


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Norquist Statement on Obamacare Taxes in Senate Health Bill

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Posted by Elizabeth McKee on Thursday, July 13th, 2017, 1:12 PM PERMALINK

Today Americans for Tax Reform president Grover Norquist issued the following statement on the newly released Senate health bill:

“All Obamacare taxes should be repealed. The Trump tax reform plan, the House health bill, and the original Senate health bill abolished the Obamacare 3.8% Net Investment Income Tax. Given the most recent language leaves some of the taxes in place, it is important for Senate Leadership to make it clear that those taxes will be abolished in tax reform this year.”


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Stop the IRS from Reading Your Emails

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Posted by Americans for Tax Reform on Thursday, July 13th, 2017, 10:40 AM PERMALINK

Statement of Support for Congressman Yoder's Amendment to the Financial Services Appropriations Legislation:

Congressman Yoder's Amendment to the Financial Services Appropriations Legislation will prevent the IRS, CFPB and SEC from using funds to attempt to read Americans emails and other digital content without a warrant. Until the Electronic Communications Privacy Act is updated by passage of the Email Privacy Act, the ECPA has a loop hole that some government agencies claim allow them to dig into a person's private documents without a warrant. This is not what was intended by the Fourth Amendment.  Americans for Tax Reform & Digital Liberty support the inclusion and passage of Congressman Yoder's Amendment.

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Pennsylvania’s Budget Funding Quandary

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Posted by Shane Otten on Wednesday, July 12th, 2017, 9:12 AM PERMALINK

On Monday, Pennsylvania Governor Tom Wolf (D) announced he will let the $32 billion budget, approved by both legislative chambers on June 30th, pass into law without his signature. Before Gov. Wolf’s decision, Pennsylvania was one of seven states without a budget for the new fiscal year. However, the Pennsylvania legislature is not finished with their new budget, as no measure to fund it has been approved, marking the second consecutive year Gov. Wolf has allowed a budget to become law without a way to pay for it.

Pennsylvania legislators are split on how to address the Keystone State’s $2.2 billion deficit, also known as a $2.2 billion overspending problem. Back in February, Gov. Wolf introduced a $1 billion tax package, including an expanded sales tax and a tax on natural gas production. House Republicans have rejected these tax hikes and instead have proposed various measures to grow state revenue without raising taxes.

Proposals to raise revenue without raising taxes include allowing 40,000 slots-style video game terminals (VGT) in bars, bowling alleys, and other establishments across the state, which could raise over $500 million once fully implemented. Other proposals call for selling more liquor licenses and permitting online gambling as well as allowing online sales of state lottery tickets. However, Senate Republicans have expressed opposition to VGTs. As Pennsylvania is second only to Nevada in total gambling revenue, some in the legislature are worried that VGTs could take revenue away from the state’s casinos. 

House Majority Leader Dave Reed (R-Indiana) recently expressed his disagreement with Gov. Wolf and others who are calling for higher taxes to balance the budget. "Look, there's two sides to credit problems. One is not just more taxes, one is less spending," Reed said.

Both sides do agree on borrowing $1.5 billion from master tobacco settlement funds to close the shortfall. Settlement funds bring in approximately $350 million per year. Until the revenue portion of the budget is balanced, lawmakers plan to withhold $563 million of funding from four state universities. Gov. Wolf’s failure to offer sustainable budget solutions is creating a ripple effect that hurts the whole state.

ATR is urging Pennsylvania lawmakers to reject balancing the budget with tax increases, such as the tax hike on online travel agents now being demanded by Gov. Wolf. Pennsylvania already has the nation’s 11th highest state and local tax burden. If that weren’t bad enough, Keystone State taxpayers have been hit with more than 20 federal Obamacare tax increases over the last eight years. As the Commonwealth Foundation has documented, it is clear that Pennsylvania’s budgetary problems are found on the spending side of the ledger. If Pennsylvania lawmakers had kept spending in line with population growth and inflation over the last three years, the state would have increased spending by $1 billion and the budget would be balanced.

IRS data shows that citizens are voting with their feet and leaving Pennsylvania. From 2014-15, the most recent year for which data is available, Pennsylvania experienced a net loss of over 16,000 residents, who took $1 billion in income with them. Tax hikes like what Gov. Wolf has called for will only exacerbate this exodus and make it even more difficult to compete with the likes of North Carolina, Texas, Florida, and Tennessee, states that are enacting tax relief and keeping spending in check. Rather than balance the budget with job-killing tax increases, Pennsylvania should put spending in line with revenues, pass a budget that does not include tax increases, and go on summer vacation. 


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ATR Supports Section 236 of FY18 Housing and Urban Development Appropriations Act

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Posted by Paul Blair on Tuesday, July 11th, 2017, 4:41 PM PERMALINK

In the FY18 Transportation and Housing and Urban Development Appropriations Act offered by Congressman Mario Diaz-Balart (R-Fla.), guarantees for mortgages insured by the Federal Housing Administration (FHA) would no longer be backed if they were tied to a controversial energy efficiency loan program known as the Property Assessed Clean Energy (PACE) program. Americans for Tax Reform supports this language because residential PACE programs not only put taxpayers at risk but the program fast-tracks alternative energy mandates inherent in energy sources such as solar.

The language can be read here:

SEC. 236. None of the funds made available under this Act for new guarantees of mortgages insured under the Mutual Mortgage Insurance Fund may be used to guarantee or insure any mortgage on a property that is subject to a loan or other obligation, including those billed as taxes or assessments, for the purpose of financing any improvements under a Property Assessed Clean Energy or substantially similar program, if any portion of such loan or obligation is or has the potential to be in a lien position superior to the mortgage to be insured or guaranteed under the Mutual Mortgage Insurance Fund.

Residential PACE is a government-backed and managed loan program used by private property owners to finance energy efficiency or renewable energy upgrades. In the case of most residential programs, this involves a complicated financing scheme where municipalities create energy assessment districts and local governments issue bonds to loan providers. The loans can be issued by third parties, but are secured by a property tax lien and collected through municipal tax bills, attaching the loans to the property and not the person.

The first PACE program was implemented in Berkeley, California in an effort to address climate change by providing a no-cost up-front option for homeowners to make alternative energy upgrades to their property.

Senator Tom Cotton has called PACE “a scam,” and has offered federal legislation with Senator Marco Rubio (R-Fla.), and Senator John Boozman (R-Ark.) aimed at addressing some of the consumer protection concerns that have arisen as residential PACE loans have grown rapidly in recent years.

PACE loans can be used for a wide range of property upgrades, ranging from HVAC systems to solar panels.  As a federal mandate, PACE loans don’t currently require credit-checks and they make it easier for a property owners to qualify for high interest loans for energy systems that are highly subsidized by taxpayers nationally. Additionally, through solar “net metering” policies and other generous tax credits, many of the upgrades being financed by local governments are those that take advantage of crony capitalism in the energy market. PACE exacerbates the problems inherent in alternative energy systems.

To read ATR’s full primer on PACE financing in the United States, click here.

ATR supports Section 236 of this Act and urges Congress to adopt it for FY18.

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CFPB Arbitration Rule A Boon for Trial Lawyers, Not Consumers

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Posted by Adam Johnson on Tuesday, July 11th, 2017, 1:36 PM PERMALINK

This week the Consumer Financial Protection Bureau (CFPB) issued a new rule that prevents certain financial firms from using clauses in agreements with consumers, known as arbitration clauses, to stop litigation complaints. Some of these arbitration clauses require complainants to undergo mediated arbitration with these companies instead of class-action lawsuits. The new rule also requires companies to pay correspondence fees if their arbitration administrators do not pay the full amount of financial settlements.

This rule was not confirmed or enacted by any group of elected officials, it was agreed upon by a small group of political bureaucrats appointed by former President Obama. This is one of many regulations that the bloated Obama-era CFPB has imposed on the financial sector. It is an overreach by the government and while it is a burden on financial companies, it is extremely harmful to the consumer.

It may seem as if by allowing consumers to enter class-action lawsuits with these financial companies and banks they would have a better chance to right the wrongs of alleged fraud and abuse. This could not be further from the truth.

The arbitration clauses that the CFPB and the Director, Richard Cordray, claim are making it “impossible” for consumers to seek proportional compensation and restitution are actually a benefit to American consumers. Within these clauses it allows for settlements to be made that on average award more money than litigation would.

In their own study, the CFPB even confirms that typically payouts to consumers after litigation was less than $2.00 a person, which is significantly lower than the amount awarded during the arbitration process. In the same study, it states that only 20 percent of class-action lawsuits are approved and among those the average wait time for a settlement is around 3 years. This is compared to the arbitration process where the wait time is only 6.9 months.

By issuing this rule, the CFPB forces consumers to forego the less stressful and more beneficial process of arbitration. These unchecked and unnecessary regulations do not help consumers, but are a boon for trial attorneys.

The CFPB claims this new rule will help consumers, but like most of the regulations and rules it churns out, it puts an even larger chokehold on Americans under the guise of protecting them.


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Norquist: GOP Tax Reform is “really going to spike economic growth”

Posted by Elizabeth McKee on Monday, July 10th, 2017, 5:17 PM PERMALINK

Appearing on Fox News Channel’s Sunday Morning Futures, president of Americans for Tax Reform Grover Norquist told Maria Bartiromo that Trump and the GOP congress will enact tax reform this year, which is “really going to spike economic growth.”

Norquist said: “I think it’s certainly going to be moving forward immediately - get the corporate rate down, the individual rates down, the doubling of the personal exemption will take place immediately.”

According to Norquist, the benefits of bringing the corporate rate down to 15% cannot be overstated:

“Taking the corporate rate from 35% to 15% should be understood not simply as a tax cut - which it is - but it’s also fundamental tax reform. Because if the corporate rate is not 35%, the highest in the world, but down to 15%, one of the lower rates in the world, then we don’t have a lot of our international trade problems. It is reform.”

Norquist continued, “As soon as you take the corporate rate down to 15%, you will see tremendous changes in investment. All of that lovely money overseas – the 2 to 3 trillion dollars – will flow back to the United States this year. It is really going to spike economic growth.”

Norquist believes that Republicans will be incentivized to act quickly on tax reform because it will be a deciding issue in the midterm elections. He said:

“If [the Republicans] want to maintain control of the House of Representatives in the 2018 elections, they need to be able to demonstrate not just progress on regulations and some of these other issues – which are very good – but dramatic, undeniable growth in jobs and GDP. And that will flow from taking the corporate rates down, the individual rates down, and allowing all that lovely money American-earned money overseas to be brought back to the United States.

President Trump, too, is committed to cutting taxes. According to Norquist, “The President has been very, very clear: tax rates are coming down for all businesses, all people. The President may sometimes go back and forth on some things; on this issue, he has been emphatic, repetitive, and clear.”

Watch the full video here.

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ATR Applauds DOI’s Efforts to Improve Energy Access on Federal Lands

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Posted by Adam Johnson on Friday, July 7th, 2017, 2:02 PM PERMALINK

This week Secretary of the Interior Ryan Zinke issued a secretarial order to address the disastrous wait time and inefficiencies plaguing the process for receiving permits to produce oil and natural gas on federal land. In 2106 Applications for Permits to Drill (APD) took on average 257 days to process despite the fact that the Department of Interior (DOI) and the Bureau of Land Management (BLM) are statutorily required to process APD requests within 30 days. 

The order issued by Secretary Zinke is a positive step to improve the wait time for APDs and increase support to the offices of the Bureau of Land Management to create more efficiency in the system.

Due to these increased wait times on APDs and the lease sales, oil and natural gas production on federal lands has trekked downwards. During his eight years in office former President Obama repeatedly claimed natural gas production in the U.S. was the highest in the world and surged under his Presidency. 

However, he would be sorely wrong on that issue. During Obamas tenure natural gas production on federal lands saw a 27% decrease in total with an additional 20% decrease in leased acreage. This is not a sign of a “surge” or good natural gas production, this is a loss of jobs, higher energy costs, and pots increases in energy dependence on other countries’ oil and natural gas.

Secretary Zinke’s order is one that could change this for everyday Americans looking for good paying jobs and affordable energy costs that would in turn decrease not just for businesses, but also consumers. 

This news is encouraging to since it shows that this administration, not like its predecessor, is serious about government efficiency and streamlining burdensome red tape that restricts job creation and energy independence.


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Norquist: The Media Won’t Mention how Repealing Obamacare Helps the Middle Class

Posted by Elizabeth McKee on Thursday, July 6th, 2017, 11:05 AM PERMALINK

Americans for Tax Reform president Grover Norquist appeared on FBN’s Risk & Reward with Deirdre Bolton to explain how repealing Obamacare will help millions of middle-class Americans.

Norquist said, “Remember Obama, when he ran for office and when he sold us Obamacare, told us no one who made less than $250,000 a year would ever pay anything – not a nickel, not a penny – in higher taxes. In point of fact, quite a number of the Obamacare taxes directly hit the middle class.”

Watch the full clip here.

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California Endures a Spike in Correctional Costs

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Posted by Kyle Loeber on Thursday, July 6th, 2017, 10:41 AM PERMALINK

California faces a crisis of rising costs inside the state’s correctional facilities. Estimates now show that the average price to house one inmate for the year has climbed to nearly $76,000.

The United States’ typical price per inmate hovers around $32,000. At well over double the national average, California risks falling even deeper into debt. The state’s troubling trend puts not only the 130,000 inmates at risk but the entire public as well.

A series of federal court orders in response to prison overcrowding can be attributed to the failure to relocate correctional staff in proportion to their shrinking inmate numbers. Right On Crime correctly notes that “many states can learn from the California experience and take pro-active steps to avoid federal court intervention that removes the issue from the democratic process and can impose costs beyond the ability of policymakers to manage.”

California’s new spot as the most costly correctional system in the nation has been a mounting problem since 2005. Costs have doubled in the last decade and the state now tops New York in dollars per inmate. Federal government intervention has cornered the state into programs and initiatives that have proved inefficient.

State Sen. Jim Nielsen, a Republican from the 4th District, blames the unforeseen expenditures on a series of misleading statements during the reform process. A “prison dividend” would have been paid out from savings in other areas to offset the skyrocketing costs, but the legislature has failed to effectively establish these programs according to Nielsen. According to a 2012 study by the National Institute of Corrections, taxpayers in California are confronted with a near 50% increase in inmate costs when compared to other states.

States approaching justice and sentencing reform initiatives should take proactive measures hands while looking closely at California to prevent similar problems in local communities.

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