Coalition Letter: Stop the HIT and Medical Device Tax
You can view the PDF HERE.
August 10, 2017
The Honorable Paul D. Ryan
Speaker, United States House of Representatives
H-232, The Capitol
Washington, D.C. 20515
The Honorable Mitch McConnell
Majority Leader, United States Senate
S-230, The Capitol
Washington, D.C. 20510
Dear Speaker Ryan & Leader McConnell:
We write to urge you to prevent Obamacare's tax on Americans' health insurance and the medical device tax from going into effect in 2018. Unless Congress acts soon, both tax increases will go into effect on January 1, 2018, leading to higher premiums and higher costs for middle class families, seniors, and small businesses.
Ideally, both the health insurance tax and medical device tax should be repealed permanently, as should all one trillion dollars of Obamacare taxes. However, given the recent collapse of healthcare reform legislation, lawmakers should act to delay these two taxes so they do not hit taxpayers in 2018.
Allowing the health insurance tax to go into effect in 2018 will directly hurt middle and low-income families. Half of the tax is paid by those earning less than $50,000 a year and it will increase premiums by $5,000 per family over the next decade according to research by the American Action Forum.
In total, the tax hits 11 million households that purchase through the individual insurance market and 23 million households covered through their jobs. Next year alone, the tax will total $14.3 billion. Over a decade, these taxpayers will pay roughly $150 billion more if the tax is not repealed.
The health insurance tax is also devastating to small businesses. It is estimated to directly impact as many as 1.7 million small businesses. 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.
The 2.3 percent medical device tax is also harmful to small businesses. There are more than 6,500 medical device companies in the U.S., 80 percent of which have fewer than 50 employees. The industry contributes $150 billion annually to the economy. The tax impairs the industry's ability to innovate, invest, and create jobs.
If Congress allows it to go into effect in 2018, the medical device tax could lead to more than 25,000 lost jobs by 2021. Over the next decade, this excise tax is projected to increase taxes by $30 billion.
Small businesses account for half of all jobs in the U.S. and two-thirds of new jobs in recent decades, so the health insurance tax and medical device tax mean businesses are able to spend less on new workers, higher wages, or new equipment.
Absent full repeal, Congress must use the remaining months of the year to delay the health insurance tax and medical device tax so they do not go into effect in 2018 and increase taxes.
American families, seniors, and businesses have already been hurt by the failure to repeal Obamacare's taxes. The last thing taxpayers need is even more taxes to go into effect.
President, Americans for Tax Reform
James L. Martin
Founder & Chairman, 60 Plus Association
Senior Director of Policy Relations, Alabama Policy Institute
Lisa B. Nelson
CEO, American Legislative Exchange Council
Ashley N. Varner
Executive Director, ALEC Action
President, Association of Mature American Citizens
President, Campaign for Liberty
President, Center for Individual Freedom
President, Citizen Outreach (Nevada)
Executive Director, Citizens for Limited Taxation Massachusetts
President, Council for Citizens Against Government Waste
Executive Director, Digital Liberty
Chairman, Florida Center Right Coalition
CEO, Freedom Foundation of Minnesota
President, Galen Institute
President, Georgia Public Policy Foundation
Carrie L. Lukas
President, Independent Women's Forum
Heather R. Higgins
President and CEO, Independent Women's Voice
Jenna A. Robinson, Ph.D.
President, The James G. Martin Center for Academic Renewal
Sal J. Nuzzo
Vice President of Policy, The James Madison Institute (Florida)
President and CEO, Louisiana Association of Business and Industry
Chair, Maine Center-Right Coalition
Pem & Ruth Schaeffer
Maine Conservative Activists
The Honorable Kurt Zellers
Chair, Minnesota Center-Right Coalition
President, Montanans for Tax Reform
President, National Taxpayers Union
The Honorable William O'Brien
Former Speaker, New Hampshire House of Representatives
Co-chair, New Hampshire Center Right Coalition
The Honorable Stephen Stepanek
Former Chairman, Hew Hampshire House Ways & Means Committee
Co-chair, New Hampshire Center Right Coalition
Chairman, Northeast Ohio Center-Right Coalition
Executive Director, Oregon Capitol Watch Foundation
CEO, Quantum Communications (Pennsylvania)
CEO, Rhode Island Center for Freedom and Prosperity
Paul J. Gessing
President, Rio Grande Foundation (New Mexico)
Dr. Deane Waldman
Director, Center for Health Care Policy, Texas Public Policy Foundation
President, Taxpayers Protection Alliance