On Monday, House Republicans released legislation that would repeal or modify many of the most significant portions of the Affordable Care Act (ACA). A central theme of the GOP plan is that it would significantly cut funding for low- and middle-income families’ health care, while eliminating the ACA’s expansion of Medicare taxes on the wealthiest taxpayers.
The ACA expanded the Medicare tax so that it currently applies not just to income from work, but also to most investment income received by high-income people. It also increased the Medicare tax rate on the highest income people from 2.9 percent to 3.8 percent. Repealing these ACA taxreforms would slash taxes on the super rich, while 98 percent of all taxpayers would see no tax change.
The most recent Internal Revenue Service (IRS) data show that in 2014 more than two-thirds of the Obamacare Medicare taxes were paid by individuals making more than $1 million. A third of the taxes were paid by individuals making more than $10 million. Repealing these taxes would give tax filers making more than $10 million dollars an average tax cut of more than half a million dollars a year.
Repeal would also be very expensive. According to estimates from the Joint Committee on Taxation, the repeal of the Medicare tax expansions would cost $275 billion over 10 years.
The House GOP proposal would also repeal a series of tax increases on health industry companies such as the medical device tax, a tax on health insurance providers and prescription drug makers. Altogether, the bill would repeal about $594 billion in tax increases.
At a time of growing income inequality, the House GOP is proposing to make things much worse by taking away critical healthcare coverage and support from low- and middle-income families and redistributing the savings from these cuts to pay for tax cuts for the wealthy and corporations.