So it begins. If you are among America’s wealthiest, the first wave of Republican tax cuts is about to come your way, but at a terrible cost: You will receive an immediate, billion dollar windfall tax cut when millions lose their ACA health insurance – and for some, their health and their lives!
And it gets worse. While padding the wallets of America’s billionaires, Obamacare’s repeal/delay will significantly raise taxes on millions of low and moderate income families. Brandon DeBot of the ever reliable Center on Budget and Policy Priorities explains below.
With so many millionaires, billionaires and corporations about to benefit from wave after wave of Republican tax cuts, the Piggies are gathering at the trough for a looooong, extended feast. And what is a corporate or human Billionaire Piggy going to do with even MORE money at their disposal? Well, it’s not too likely that those already flush with cash will spend their billions in the U.S. IMMEDIATELY to stimulate economic growth (so much for that favorite and fundamental rule of economics, the multiplier effect, Piggies, when your windfalls aren’t quickly spent here at home).
Billionaire Piggies also can’t provide the kind immediate economic stimulus that Obamacare now does through spending for/at clinics, hospitals, doctors and specialists, dentists, PA’s, nurses, orderlies, hospital cafeteria workers, med administrators and staff, med suppliers, med device manufacturers, drug stores, drug companies (Yuck!), home health care services, and on and on. Now that’s stimulus! That is a multiplier effect!
Ironically, one way this Piggy tax giveaway WILL stimulate the economy is by making caring Americans lucky enough to retain their health insurance sick to their stomachs and in need of immediate health services.
Republicans’ planned bill to repeal the Affordable Care Act (ACA), which is expected to be similar to the repeal bill that President Obama vetoed in January 2016, would give an immediate windfall tax cut totaling billions to the highest-income Americans by eliminating two Medicare taxes — the additional Hospital Insurance tax and the Medicare tax on unearned income — that both fall only on high-income filers, as we explain in two new papers. At the same time, Republicans’ plans for ACA “repeal and delay” would likely significantly raise taxes on about 7 million low- and moderate-income families by eliminating their premium tax credits and would threaten existing coverage for millions more.
The size of the tax cuts for the highest-income households is staggering. Millionaire households would reap a full 80 percent of the tax cut from repealing these two provisions in 2017, as our first analysis explains using Tax Policy Center (TPC) estimates. Their tax cuts would average $49,370 apiece.
The very highest-income households would benefit even more. The top 400 highest-income filers had adjusted gross incomes averaging $318 million in 2014 (the last year for which data are available), according to the Internal Revenue Service. If their income levels and income sources in 2017 are similar to those in 2014 and the ACA’s Medicare taxes on high-income households are repealed, our second analysis estimates that:
The top 400 filers will get tax cuts averaging roughly $7 million apiece;
They will receive a net total of about $2.8 billion in tax cuts — roughly $28 billion over ten years if these levels remain similar; and The incomes of the top 400 after federal income taxes would rise by almost 3 percent.
Meanwhile, the roughly 160 million households with incomes below $200,000 would get nothing from the repeal of these two taxes. In fact, ACA repeal would significantly raise taxes on about 7 million low- and moderate-income families due to the loss of their premium tax credits — worth an average of $4,800 in 2017 — that help them buy health coverage through the health insurance marketplaces and afford to go to the doctor when needed.
The total tax cut for the top 400 is roughly the value of premium tax credits that 813,000 people in the 20 smallest states and Washington, D.C. would lose combined if the ACA is repealed without a replacement (see graph).