But there should be more attention on those who could benefit right away – the super rich who would get a huge tax cut.
At the same time, millions of Americans – including 1.2 million Californians – would lose tax credits on health insurance premiums they now get under the Affordable Care Act.
Of course, House Republicans hell-bent on repealing Obamacare don’t mention it would rob from the vast majority to give a windfall to the wealthy. Is that what House Majority Leader Kevin McCarthy of Bakersfield and other California Republicans really want? How will they defend this to their constituents who would get the short end of the stick?
The expected House GOP repeal bill would eliminate two tax hikes on upper-income households (individuals earning $200,000 or more a year, couples earning $250,000 or more) that have been used to subsidize health care for families. One is a 0.9 percentage point increase in the top Medicare payroll tax rate to 2.35 percent; the other is a 3.8 percent surtax on investment income.
A repeal plan unveiled Monday by Republican Sens. Bill Cassidy of Louisiana and Susan Collins of Maine would temporarily keep those tax increases to help fund an alternative. Their plan would also give states the option of keeping Obamacare, so it’s unlikely to get very far in their own party.
If those tax hikes are ended, millionaires would reap 80 percent of the tax savings, according to an analysis of IRS data by the Center on Budget and Policy Priorities.
The top 0.1 percent – those with annual incomes above $3.8 million and averaging about $7.5 million – would receive tax cuts of more than $195,000 each. And the 400 highest earners (average income $318 million in 2014) would get an average tax savings of $7 million a year, a total windfall for that group of $2.8 billion. While neither the IRS nor the Franchise Tax Board identify where the 400 live, it’s a good bet that a decent number are Californians.
On the other hand, the budget center says, repeal would raise the tax bills for about 7 million low- and moderate-income families because they would lose the premium tax credits that help them buy health coverage, an average of $4,800 a year.
That $2.8 billion windfall for the 400 highest earners is the equivalent of how much in tax credits that 813,000 people in 20 states and the District of Columbia would lose. In California, the tax credits on the chopping block average about $3,700 a year and total about $5 billion.
So the rush to kill Obamacare is not only unfair and dangerous for public health; it’s also a lucrative, reverse-Robin-Hood gift to the rich. It’s even more outrageous when President Donald Trump and Republicans in Congress are also planning other tax cuts tilted toward the wealthy.
In his inaugural speech, Trump vowed to look out for the forgotten and struggling Americans. When we finally see the details of his plan to replace Obamacare and still offer “insurance for everyone,” we’ll see if Trump is a man of his word as president.