The continuing resolution to fund the federal government through Feb. 8, now working its way to the president’s desk, includes three tax cuts that will add $31 billion to the deficit since the deal includes no spending offsets.
The three taxes, all related to the Affordable Care Act (ACA), have proven vastly unpopular on The Hill but were excluded from the recent tax reform package because Republicans couldn’t fit them into their math.
Going, going, gone — for this year and next, anyway — are the ACA’s medical device tax and the Cadillac tax on expensive health insurance policies, along with the health insurance tax on all policies, which gets a one-year reprieve.
Delaying these three taxes garners widespread bipartisan support because Republicans hate taxes in general and Democrats hate what these taxes do to their constituents (device makers, unions with lavish health insurance policies).
The Cadillac tax is popular with economists as it is said to hold down pricing on all policies by forcing businesses and individuals to pursue moderation in health care and health insurance.
However, the health insurance tax tends to raise prices. According to the New York Times: “Actuaries and independent analysts agree that the tax does tend to increase insurance prices”
Today’s action doesn’t repeal these taxes but delays them. Similar delays have been voted in the past, signaling that these postponements could become a periodic ritual.