House GOP health bill adds up to big tax cut for the rich
WASHINGTON (AP) - 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.
Official estimates for how these people would fare under the bill have not been made public, even as House committees move ahead with the legislation.
The new health bill was released this week as congressional Republicans and President Donald Trump try to make good on campaign promises to repeal and replace Obama's health law. House GOP leaders say they want to give consumers more access to affordable health care with less government interference.
The effort, however, has been criticized by both the left and the right. Democrats argue that fewer people will have health insurance, while some conservatives are calling the plan "Obamacare Lite."
The biggest tax cut would eliminate a 3.8 percent 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 percent of the benefit from repealing the tax would go to the top 1 percent 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 percent 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."
"This bill sends a loud and clear message: Tax cuts for special interests and the wealthy matter more than your health care," Wyden said.
Rep. Kevin Brady, chairman of the tax-writing Ways and Means Committee, said the health care taxes hurt consumers, businesses and economic growth.
"They hurt the economy. They hurt health care. They achieve nothing," the Texas Republican said at a news conference. "I don't want Americans to continue to struggle under the Obamacare taxes."
Despite the lost tax revenue, Brady said the overall bill would not add to long-term budget deficits. However, no official estimates have been released.
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 drugmakers 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 percent of their income. The bill would return the threshold to 7.5 percent 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 percent excise tax. Repealing it would save them $20 billion over the next decade.
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Associated Press Writer Ricardo Alonso-Zaldivar contributed to this report.
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