No big tax break for wealthy?

The upshot is: Duffy said the GOP replacement for Obamacare does not give massive tax cuts to wealthy Americans.

As we’ve covered in a previous fact-check, there’s no question that people at the top of the income scale would be singled out for tax cuts that, over 10 years, are estimated to be worth what can be considered a massive amount: hundreds of billions of dollars.

The bill

In a major political victory for President Donald Trump and U.S. House Speaker Paul Ryan of Janesville, the GOP bill was narrowly approved by the House of Representatives five days before Duffy’s statement. Even Republicans, though, say the legislation will likely be changed in the Senate.

The House version would repeal nearly all taxes contained in Obamacare and make other tax changes. No official estimates have been done on the current version of the bill, which was changed after the original bill was voted down by the House in March. But the tax cut figures are expected to be similar.

The tax cuts

Obamacare imposed a series of tax increases, primarily in an effort to provide health coverage to nearly all Americans. Some of those were aimed squarely at the wealthy.

We found U.S. Rep. Mark Pocan (D-Madison) went too far when he said that under “Trumpcare,” as some Democrats call the GOP health bill, “$600 billion worth of tax breaks will go to the wealthiest in this country.” Our rating was Half True. The tax breaks don’t help only the wealthiest — but people on the high end of the income scale certainly benefit.

Estimates on the original bill by Congress’ Joint Committee on Taxation, which is staffed by independent professionals, put the value of the tax cuts at $600 billion over 10 years (2017 through 2026).

Fully $275 billion would go only to high-income earners — families with $250,000 or more in income ($200,000 for singles). That would be accomplished by repealing two of the key tax increases that fund Obamacare: a 3.8% tax on investments (capital gains, dividend and interest income) and a 0.9% Medicare surtax.

According to the nonprofit Tax Policy Center:

85% of the benefits of repealing the investment tax would go to the top 1% of income earners.

Ultimately, repealing the investment and the Medicare taxes would mean a 2% increase in income for the top 1% — or $43,000 per year.

Duffy’s staff argued that the GOP plan does not include tax cuts because it merely repeals tax increases, and that the tax increases themselves were never portrayed as “massive.”

But the $43,000 in additional income that the top 1% would get from the tax reductions begins to approach the median household income in the United States — $55,775 per year.

As for Duffy’s reference to repealing a 2.3% excise tax on medical device makers, that could result in lower prices for average consumers. And some other tax changes in the GOP health plan would benefit the middle class. But that doesn’t negate the fact that other tax breaks specifically help the rich.

Our rating

Duffy says the Republican replacement for Obamacare does not give massive tax cuts to wealthy Americans.

The bill that some call “Trumpcare” includes the repeal of tax hikes that specifically target the rich. Indeed, over 10 years, hundreds of billions of dollars in tax cuts would benefit only those earning $200,000 a year or more.

We rate Duffy’s statement False.