The Big “I” continues its efforts to fight against unfair and misguided taxes in the Affordable Care Act (ACA).
This week, the association joined more than 40 small business trade associations in sending a letter to U.S. Senate Majority Leader Mitch McConnell (R-Kentucky), urging the Senate to repeal the harmful ACA tax on net investment income (NII) as part of any health reform legislation.
Enacted as part of the ACA, the NII tax was promoted as both a “tax on the rich” and a means of shoring up the Medicare trust fund. However, the tax has no connection to Medicare, and its burden falls on many families and Main Street businesses. The surtax imposes an additional 3.8 percentage points of tax on investment income, including capital gains, dividends and interest, as well as certain S corporation and partnership income, for families making as little as $200,000 a year.
For pass-through businesses organized as partnerships and S corporations, the tax represents a drain on the capital they use to invest and create jobs. The Big “I” believes Senate consideration of legislation that rolls back significant portions of the ACA without repealing this tax would be detrimental to Main Street businesses, and an enormous missed opportunity.
In related health reform news, earlier today, Senate Republican leadership released an updated version of the “Better Care Reconciliation Act” (BCRA), legislation that would repeal and replace major portions of the ACA. Unfortunately, in a change from the first version, this one would leave in place two ACA taxes: the 3.8% tax on NII and the 0.9% Medicare surtax on wages and self-employment income. It remains to be seen whether this new version of the BCRA can garner the support necessary to move through the Senate.
The Big “I” offers additional health care resources, which members must log in to view, and will continuously provide updates as these bills continue to change.
Wyatt Stewart is Big “I” senior director of federal government affairs.