If You’re Rich, The Health Care Act will Pay YOU 50K; If You’re Poor, Get Ready To Pay $1,420
The typical family making less than $10,000 will lose $1,420 if the Republican health care plan passes, a cut that amounts to almost one-third of their income. Meanwhile, the average family making $200,000 or more would gain $5,640, according to a new analysis from the Tax Policy Center and the Urban Institute’s Health Policy Center:
The report combines an analysis of the tax provisions of the act — which repeal the taxes the Affordable Care Act imposed largely on rich people, like a 3.8 percent surtax on investment income over $250,000 and a 0.9 percent surtax on wages over that amount — with changes to the ACA’s coverage provisions. That includes massive cuts to Medicaid(more than $880 billion per the Congressional Budget Office) and changes to Obamacare’s tax subsidies; the Republican proposal would make those subsidies smaller for poor people and extend eligibility to people making hundreds of thousands of dollars a year, with phaseout only beginning at $150,000 for dual earners.
It’s not surprising that cutting taxes on the rich while gutting health coverage for the poor and middle class has regressive consequences. But the numbers the Urban analysts arrive at are still shocking. People making more than $1 million a year would get an average tax cut of $51,410.
Those at the very bottom, making $10,000 a year or less, would get a mild tax cut because they’d gain eligibility for premium tax credits that they now don’t receive (as they’re typically on Medicaid). But it would be swamped by the $1,630-a-year average loss they’d incur due to the rollback of the Medicaid expansion and the “per capita cap” the law would impose on Medicaid spending going forward, which amounts to a large ongoing cut in program funding. The Medicaid changes cause a benefit reduction to the poorest Americans worth 37.4 percent of their income, on average. (Note that income here excludes non-cash benefits.)
Or look at it this way. Fully 46.2 percent of the tax cuts in the law go to literal millionaires. More than 70 percent of the cuts go to families making $200,000 a year or more, and 91 percent go to families making over $100,000. But more than three-quarters of the benefit cuts hurt families making $30,000 a year or less. A third hurts families making under $10,000 a year, families who are definitionally all in poverty.
And this is before considering the new cuts to Medicaid included in the manager’s amendment unveiled Monday night, which only makes the harm to poor people graver.
The Republican health plan, in other words, is a massive redistributionary measure, which cuts aid to the poorest people in America to give huge tax cuts to millionaires. That’s not an inflammatory, partisan statement. That’s a statement of fact. This is what the bill that the new Republican administration is devoting the first months of its term to passing does.
Content Source: Vox
Image Source: Warner Brothers