– 2017-03-21 23:01:25
Health Bill’s Tax Cuts Worth $600 Billion,
Mostly for Corporations and the Rich
Herb Jackson / USA TODAY Network
(March 7, 2017) — It may become more expensive for people with lower incomes to buy health insurance, but a House Republican plan to replace the Affordable Care Act would make going to a tanning salon cheaper and cut taxes for insurance companies and wealthy investors.
In all, the bill unveiled Monday night would cut taxes by nearly $600 billion over the coming decade, according to estimates by the Joint Committee on Taxation.
The GOP plan repeals nearly all of the taxes raised in the 2010 law known as Obamacare.
“They hurt the economy, they hurt health care, they achieved nothing,” said Rep. Kevin Brady, a Texas Republican and Ways and Means chairman. “I don’t want Americans to continue to struggle under the Obamacare taxes, which is why we’re moving to repeal them.”
Some tax changes in the 2010 law being repealed, such as a 10% surcharge on visiting a tanning salon and caps on pre-tax contributions to flexible spending accounts, hit a broader part of the population.
Melinda Norton, president of the American Suntanning Association, said the Obamacare tax had a devastating effect on the industry. “At the time, there were 18,000 small businesses across the country, now there’s 9,000.”
But the law’s biggest revenues came from assessments on the wealthy and corporations, and they will be the biggest beneficiaries from a repeal.
“This is a payoff to insurance companies to get them to buy into their program,” said Rep. Bill Pascrell, a Democrat from New Jersey and member of the Ways and Means Committee. “This is pretty obvious.”
Pascrell said the GOP proposal would hasten the insolvency of Medicare and reduce the availability of coverage for the poor and middle class. Pascrell said he would try at a hearing on the bill Wednesday to block a provision that would increase to $1 million the amount of an executive’s salary that an insurance company could deduct from its corporate taxes.
The ACA had lowered the deduction to $500,000, effectively requiring companies to pay higher taxes on top employees. Setting it back to $1 million would reduce revenues to the government by $400 million over the coming decade, the Joint Committee estimated.
Other tax changes in the 123-page bill, and the lost revenue over the coming decade, include:
* Eliminating, at cost of $158 billion, the ACA provision that imposed a 3.8% tax on net investment income of individuals earning more than $200,000 and couples more than $250,000
* Repealing the annual fee on health insurance providers, costing $145 billion
* Repealing a 0.9% Medicare payroll tax surcharge on wages greater than $200,000 for individuals ($250,000 for couples) at a cost of $117 billion
* Postponing until 2025 a tax on the most generous “Cadillac” health benefit packages due to go into effect in 2020, at a cost of $49 billion
* Reducing from 10% to 7.5% the threshold for deducting medical expenses from income, at a cost of $35 billion
* Repealing a tax on branded prescription drugs, at a cost of $25 billion
* Repealing a tax on medical devices, at a cost of $19.6 billion
* Repealing a cap of $2,500 on the pre-tax dollars workers could put into flexible spending accounts annually, at a cost of $19 billion
* Increasing, to $6,550 for an individual and $13,100 for couples, the amount that could be put annually into a Health Savings Account, and providing an added bonus for those over 55 years of age, at a cost of $18.6 billion
Allowing pre-tax dollars in flexible spending and health savings accounts to be spent on over-the-counter drugs, at a cost of $5.5 billion
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