In their updated health bill, House Republicans are doubling down on their plan to cut taxes for high-income households while cutting health insurance for mostly low- and moderate-income households -- speeding up tax cuts for the very richest people so they take effect in 2017, rather than 2018.
Specifically, the updated bill would eliminate, for 2017, two taxes that fall only on high-income filers: the additional Hospital Insurance (HI) payroll tax on high earners and the Medicare tax on unearned income.
Repealing these taxes a year earlier would:
- Benefit only individuals with incomes above $200,000 and couples with incomes above $250,000 on top of the $275 billion in tax cuts over ten years that the Joint Committee on Taxation estimates they would have received starting in 2018 under the prior version of the bill, while doing nothing for low- and moderate-income people.
- Provide billions of dollars in the additional year of tax cuts for millionaires, who would receive 80 percent of the benefit and tax cuts of nearly $50,000 on average in 2017, the Tax Policy Center estimates. (See chart.)
- Provide another year of tax cuts of about $7 million apiece for the 400 highest-income households, we estimate using Internal Revenue Service statistics.
The updated bill would also more quickly repeal other taxes, including a tax on drug companies based on their brand-name drug sales to government health programs. Most of the benefit would likely flow ultimately to wealthy shareholders and other investors, who own the bulk of stock and other investments, as companies' profits expand.
At the same time, the House GOP bill adds more harmful Medicaid changes and retains cuts to subsidies that help low- and moderate-income people afford health coverage. The updated bill reveals, once again, that the House GOP priority is providing tax cuts for millionaires and drug companies, not helping working-class people get the health care they need.
