Obamacare taxes have disproportionately harmed middle-class families and small businesses. Rep. Kristi Noem (R-SD) has introduced important legislation in order to mitigate the negative impacts of Obamacare taxes.
H.R. 4894, the Harmful Tax Prevention Act, would delay implementation of the health insurance tax (HIT) for 2018 provided an insurer gives a rebate to customers. If allowed to remain in place, the HIT will hit American middle-class families and small businesses the hardest.
The HIT is a tax levied on insurance premiums, meaning that the cost of the tax is passed directly onto consumers. According to the American Action Forum, half of the HIT is paid by families earning less than $50,000 a year. Ultimately, the tax hits over 11 million households that purchase their insurance through an Obamacare market. Additionally, the tax hits 23 million households that are covered through their jobs, and will raise premiums by $5,000 over the next decade.
The economic impact of the HIT is devastating. Next year, the tax will cost taxpayers approximately $14.3 billion. Over the next decade, the HIT will cost taxpayers upwards of $150 billion.
Small businesses will also be hit hard if Congress fails to delay the HIT. 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.
Rep. Noem’s bill avoids this catastrophe by delaying the implementation of the costly health insurance tax. While it is imperative that Congress repeals all Obamacare taxes, this bill is a crucial step in passing health insurance reform in 2018.
Congress should pass H.R. 4894 as as standalone bill or as part of a comprehensive package. By supporting the Harmful Tax Prevention Act, lawmakers can offer immediate relief to millions of Americans by delaying the HIT.