Conservatives Revolt Over Talk of Keeping Obamacare Tax

(The Hill) Conservative groups are warning GOP senators against keeping an ObamaCare tax on investment income in their healthcare bill, an idea that has gained some traction among lawmakers.

David McIntosh photo

David McIntosh Photo by mark kimpel (CC)

GOP lawmakers have floated keeping ObamaCare’s 3.8-percent net investment income tax (NIIT) to help pay for more generous healthcare subsidies for low-income people. Democrats criticized an earlier version of the Senate’s ObamaCare repeal bill for eliminating the tax because it generally applies to high earners.

But prominent conservatives argue Democrats will criticize the bill regardless of what happens with the tax. They say the tax is harmful to economic growth and should be repealed.

“This tax, just like any tax increase, is an anathema to conservatives as it suppresses economic growth and opportunity throughout our nation,” Club for Growth President David McIntosh said in a statement Wednesday. “Under no circumstances should the NIIT be included in any forthcoming Republican ‘repeal’ bill.”


ObamaCare’s net investment income tax applies to individuals making more than $200,000 and married couples making more than $250,000. The tax falls on forms of income that include capital gains, dividends, and interest.

It is one of a number of taxes that Democrats enacted to help pay for ObamaCare. Other revenue provisions include a Medicare surtax on high earners and taxes on the medical device, prescription drug and health-insurance industries, among other things.

Republicans have long disliked the investment tax. The ObamaCare repeal bill the House passed in May would retroactively repeal the tax to the start of 2017, and the draft bill Senate Republicans released last month also would retroactively do away with the tax….

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