House GOP health bill would be big tax cut for the rich
Measure would cut 20 taxes set under Obama
WASHINGTON - The House Republicans’ health care bill adds up to big tax cuts for the rich.
The bill would cut more than 20 taxes enacted under President Barack Obama’s heath law, saving taxpayers nearly $600 billion over the next decade. The bulk of the money would go to the wealthiest Americans.
Low- and moderate-income families would lose their subsidies to buy health insurance in state and federal marketplaces.
The subsidies would be replaced by tax credits to help them buy insurance.
The biggest tax cut would eliminate a 3.8% tax on investment income for high-income individuals and families. Eliminating the tax would save these taxpayers $158 billion over the next decade, according to the nonpartisan Committee on Taxation, the official scorekeeper for Congress.
About 90% of the benefit from repealing the tax would go to the top 1% of earners, who make $700,000 or more, according to the nonpartisan Tax Policy Center.
Another big tax cut would repeal an extra 0.9% Medicare tax on wages above $200,000 for individuals and $250,000 for married couples. Repealing the tax would save higher income families $117 billion over the next decade.
Repealing the Medicare tax would also speed up the depletion of the Medicare trust fund. It would run out of money in 2025 instead of 2028, as is currently projected, said Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee.
Wyden said that “breaks a clear Trump promise not to damage Medicare.”
The bill would not repeal the health care program’s “Cadillac” tax on high-cost health insurance plans. Instead, it would delay the tax until 2025.
The tax has already been delayed once, until 2020.
This tax would hit many middle-income families, according to the Tax Policy Center. Delaying it by five years would save taxpayers $49 billion.
Among the health care taxes repealed in the bill:
Health providers pay an annual fee based on market share. Repealing the tax would save health insurers $145 billion over the next decade. Prescription drug makers and importers pay an annual fee. Repealing it would save pharmaceutical companies $25 billion over the next decade.
Taxpayers can deduct out-of-pocket health expenses if they exceed 10% of their income. The bill would return the threshold to 7.5% of income, which it was before the Affordable Care Act. Taxpayers would save $35 billion over the next decade.
Medical device makers and importers pay a 2.3% excise tax. Repealing it would save them $20 billion over the next decade.
A provision in Obamacare places a $500,000 limit on the amount of an executive’s pay that health insurance companies can deduct. The bill repeals the provision, saving insurance companies $400 million over the next decade.