Congressional Democrats, White House Were At Odds Over “Cadillac Tax” Delay

Date: December 22, 2015

Dispute Highlights Challenge Tax Would Present For Small Businesses

The Hill examined the Obama Administration’s “losing fight to preserve” the Affordable Care Act’s “Cadillac tax” on high-cost health plans, noting that President Obama on Friday signed into law a $1.8 trillion spending-and-tax package that delays the levy for two years. Citing interviews with several people familiar with the negotiations between the White House and Congress, The Hill said the Senate’s “symbolic” 90-10 vote to repeal the tax “marked a turning point” in the fight over it. In early December, House Minority Leader Nancy Pelosi (D-CA) and Senate Minority Leader Harry Reid (D-NV) “heard new ideas from the administration about how to lessen the financial blow of the Cadillac tax,” but “most of them were not taken seriously.” Meanwhile, labor groups “turned up the heat on Democrats, while business groups worked the Republican side of the aisle,” The Hill says.

What This Means For Small Business

In 2010, the National Federation of Independent Business released a statement on the deal to pass the Cadillac tax: “Small business owners…aren’t choosing these high cost plans, they’re stuck with them because they are trapped in a bad market with no choices and high costs.” Separately, the National Federation of Independent Business also reported that Democrats and Republicans are uniting in their opposition to the tax, observing that “both sides of the aisle agree the tax would be bad for business.” While the tax aims to lower healthcare costs by incenting businesses to select cheaper plans, NFIB reported “small businesses typically pay upward of 18 percent more than others for health insurance.” The differences between Congressional Democrats and the White House only serves to underscore the burden that this tax presents for small businesses. While a full repeal would be preferable, any delay in its implementation is a positive step in protecting small businesses.

Additional Reading

CNN recently reported on some of the reasons why the Cadillac tax has proven so unpopular among Republicans and Democrats alike.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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