The House of Representatives will this week vote to repeal the tax on employer provided healthcare, or ‘Cadillac Tax.’ This is good news for American workers and businesses, as it is an opportunity to eliminate one of Obamacare’s most costly and unpopular tax hikes. Americans for Tax Reform fully supports repealing the Cadillac Tax.

Repealing the Cadillac Tax is a $193 billion tax cut over the next decade, according to a recent CBO report.

The provision imposes a 40% excise tax on employer-based coverage plans which exceed $10,200 for individuals and $27,500 for families. Obamacare originally set the Cadillac Tax to go into effect in 2018, but Congress voted to delay it, and the tax has yet to see implementation. This upcoming vote will determine whether or not the tax should be repealed outright. 

The Cadillac Tax threatens the affordability and quality of health care for millions of Americans.  According to research by the Kaiser Family Foundation, nearly half of all companies which offer health insurance to their employees could face the tax by 2030. According to Cigna, the Cadillac Tax could cost families with high quality insurance plans as much as $3,400 per year.

Employers would be forced to raise deductibles/copays in the plans they offer their workers in order to avoid the Cadillac Tax thresholds, and any remaining costs from the tax could result in lower salaries. In fact, the left-leaning Tax Policy Center reported that, “70 percent of the revenue raised by the Cadillac tax will be through the indirect channel of higher income and payroll taxes, rather than through excise taxes collected from insurers.”

The Cadillac Tax penalizes quality health insurance. It raises taxes and reduces coverage for workers, while also making it harder for small businesses to offer healthcare to their employees. In short, it transfers money from workers to government officials who think they are best suited to manage your own healthcare. This is what makes the tax so unpopular, with 81% of respondents opposing it in a 2018 poll.

The Cadillac Tax is just one of Obamacare’s many tax hikes. The Health Insurance Tax, for example, taxes insurance premiums and could cost the middle class and small businesses more than $130 billion over a decade. The Medical Device Tax imposes a 2.3% excise tax on commonly used medical devices, reducing innovation and costing tens of thousands of jobs. Both of these taxes require urgent action, as they are set to go into effect on January 1, 2020. Congress should ideally repeal these provisions, but they must at least be delayed as soon as possible.

The House should vote to fully repeal the Cadillac Tax on Wednesday, and Congress should work to eliminate the myriad of tax increases Obamacare has foisted on the American people, without imposing new tax hikes in their place.