The GOPs Plan Is Basically a $600 Billion Tax Cut for Rich Americans
The GOP’s Obamacare replacement bill has an identity crisis. It repeals the individual mandate and replaces it with a worse mandate. It preserves the Medicaid expansion just long enough to anger Republicans, but not enough to please Democrats. It replaces Obamacare’s subsidies with tax credits that liberals consider impoverishing and conservatives consider unacceptable.
In the old days, legislatures used pork to try to please everybody. This bill seems exquisitely designed to please nobody—except for rich people who want a tax break. Perhaps that’s why one of the few groups to praise the bill was Americans for Tax Reform.
Look beyond the bill’s quasi-mandate and tax credits, and the Obamacare replacement bill is a $600 billion tax cut, with the benefits going almost entirely to the wealthy. To pay for its spending, Obamacare included several taxes on couples making more than $250,000, like a 3.8 percent surtax on investment income and a 0.9 percent surtax on wages. Last year, those levies brought in about $27 billion, according to Wall Street Journal analysis of IRS data. Repealing them would cost about $275 billion over the next decade; which is to say, it would transfer $275 billion from public-health spending to the richest 1 or 2 percent. Other provisions, like repealing the limit of flexible spending accounts and expanding health savings accounts, will also disproportionately benefit the rich.
That’s not all. Many companies can deduct employee salaries as a business expense when they pay taxes. Obamacare included a provision that prevented insurance companies from deducting more than $500,000 of their top executives' salaries, as a way of raising a little bit of revenue and discouraging ever-rising compensation for insurance executives. But the Republican replacement law scraps that provision, so that large insurance companies like Cigna and Aetna, which pay their CEOs more than $15 million, would find new tax savings.
https://www.theatlantic.com/business/archive/2017/03/acha-tax-cut/518889/
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