Republicans would undo a host of other Obamacare tax increases, though in most cases they would postpone repeal until 2018. | Getty Republicans' Obamacare repeal plan would cut taxes on the wealthy

House Republicans’ Obamacare replacement plan would cut taxes on the wealthy by hundreds of billions of dollars.

Their long-awaited proposal, unveiled Monday evening, would among other things kill a 3.8 percent investment tax on the well-to-do that Democrats had used to help finance the health care law, as well as a 0.9 percent surcharge on wages above $250,000.


Though the legislation is focused on making good on Republican promises to repeal and replace the health program, it would likely also amount to the first big tax cut of the Trump administration, one that comes even before lawmakers tackle tax reform in earnest. The plan should make rewriting the tax code easier by moving the cost of some tax cuts into separate legislation.

Lawmakers did not immediately provide a cost estimate, but budget forecasters have previously estimated that nixing the two taxes would cost more than $300 billion over a decade.

The move would save the top 0.1 percent of earners about $195,000 annually, according to the Tax Policy Center.

Republicans would undo a host of other Obamacare tax increases, though in most cases they would postpone repeal until 2018. Among them: levies on medical devices, insurance companies and prescription drug makers, as well as ACA limitations on flexible spending and health savings accounts.

They would also immediately kill an Obamacare penalty for failing to have health insurance, something many taxpayers are now wrestling with this filing season.

But Republicans aren’t scrapping all of the ACA tax hikes.

They want to keep its so-called Cadillac tax on pricey health insurance plans, at least for now, proposing to delay its onset until 2025. That would make it easier for them to later swap in their own cap on the tax break companies receive for providing health insurance, something many believe is needed to help rein in health costs.

"We dismantle Obamacare's damaging taxes and mandates so states can deliver quality, affordable options based on what their patient populations need, and workers and families can have the freedom and flexibility to make their own health care choices," Ways and Means Chairman Kevin Brady said in a statement.

But a top Democratic tax writer decried the plan as a giveaway to the rich.

“This bill sends a loud and clear message: tax cuts for special interests and the wealthy matter more than your health care,” said Sen. Ron Wyden, the top Democrat on the Finance Committee.

The committee is slated to formally take up the plan on Wednesday.

Democrats relied on more than a dozen tax increases to help defray the cost of the health care law, the largest of which is essentially a backdoor increase in the capital gains rate. Known among experts as the “net investment income tax,” it imposes a 3.8 percent surcharge on a broad swathe of investments by people earning more than $250,000, on top of the usual capital gains rate that tops out at 20 percent.

It was paid by nearly 4 million people in 2015 on everything from interest to annuities to royalties to some home sales to large estates, in some circumstances.

A similar number paid the 0.9 percent surtax on wages that year, and together the two taxes raised $27 billion in 2015 — more than the much better-known estate tax. House Republicans would end both taxes beginning in 2018.

They would also immediately kill the Obamacare penalty for failing to have health insurance — a charge that this year jumped to more than $2,000 per family, and one that is now confusing many people trying to do their taxes.

The Republican plan would excuse people currently on the hook for the tax for failing to have coverage last year. That could require people who’ve already done their taxes this year to file amended returns to reclaim the penalties they paid.

Republicans’ decision to delay the onset of the Cadillac tax is surprising because they have simultaneously lambasted the tax and hope to replace it with their own version of a tax on health benefits.

The additional five-year delay — it had already been postponed until 2020 — would make it easier for them to someday swap in a replacement. That’s because if they kill the Obamacare tax now and tried to replace it later, their substitute would show up in official budget tables as a tax increase — making it politically toxic.

But if they make the changes simultaneously, in the same bill, it would show up as a wash for the budget or perhaps a tax cut, depending on the details of the plan.

For now, the Republicans’ postponement means the tax won’t take effect until 15 years after the Affordable Care Act was signed into law.

Other changes in the plan would repeal Obamacare limitations on contributions to tax-preferred savings accounts as well its restrictions on a deduction for major medical expenses.