The House, Passed a Fast-Tracked Bill (H.R. 748) to Permanently Repeal the “Cadillac Tax.”
Friday, July 19, 2019
Posted by: Alyce Ryan
July 18 - Yesterday, the House, passed a fast-tracked bill (H.R. 748) to permanently repeal the “Cadillac Tax.” The Cadillac Tax, which was part of the Affordable Care Act (ACA), was originally set to go into effect in 2018, but was twice delayed (most recently through 2022). The Cadillac Tax was intended as a revenue raiser for other parts of the ACA and, if it ever does goes into effect, will impose a 40% tax on premiums paid for generous high-cost employer health insurance plans that exceed certain limits.
As reflected by the multiple times that the effective date for the Cadillac Tax has been bumped back and yesterday’s nearly unanimous vote in the House (419 to 6), the Cadillac Tax has become very unpopular on both sides of the aisle with both business groups and unions pushing hard for its repeal. Interestingly, the House Democrats were the driving force behind the latest repeal effort.
Senate Majority Leader Mitch McConnell (R-KY) has not yet stated if and when he will bring the bill to the Senate floor. Given that that it was the Democrats who pushed through the House version of the bill, while there is bi-partisan support for the repeal, there is the potential that Senate Republicans will look to add other Republican tax priorities to the bill and send it back to the House.
According to estimates from the Joint Committee on Taxation, if passed, the repeal would increase the deficit by $201 billion over the next ten years.