Wednesday, June 15, 2016

Congress Should Repeal the "HIT" Tax

The Affordable Care Act ("Obamacare") always struck conservatives as Orwellian in its name, given that it has made health care less affordable.

One piece of Obamacare, however, is accurately named:  the Health Insurance Tax, or "HIT."  This tax is indeed a "hit" to families and small businesses, which is no doubt why Congress has repeatedly deferred its implementation.

Think about that.  Obamacare is six years old and yet we are still being subjected to new taxes from it. That is, we still haven't experienced its full ability to hurt our economy, cripple businesses and otherwise screw up the health care delivery system.

Essentially, HIT is a sales tax on insurance policies. In theory, the insurance companies have to pay it, but we all know that it then gets passed to the consumer -- small businesses, farmers and people who unlike large corporations do not have the luxury of self- insurance. What's most disturbing about HIT is the hidden nature of the tax. It's part of the lack of transparency that the Obama administration used to try to dupe the public into accepting Obamacare.

We're talking about an extra $5,000 per family over the coming decade. Trade associations that have looked at the issue estimate that HIT will disproportionately hurt those in the $10,000 - $50,000 a year income range. These are families who can ill afford an extra $5000.

Fortunately, even Democrats recognize the unfairness of HIT. Last year, approximately 100 Democrats and 300 Republicans voted to suspend its impact for one year. Rather than continually delaying this HIT, Congress should just repeal it altogether.

To be sure, it would be preferable to repeal Obamacare in toto. That's not possible right now because we don't have a filibuster-proof Senate or the White House. So in the meantime, let's chip away at these provisions of Obamacare that are so outrageous that both parties recognize the need for action.

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