The GOP Tax Bill and the ACA

The Republican tax plan is like a s’more of the things they love most: a sneaky repeal of the ACA’s individual mandate sandwiched between tax breaks for the wealthy. Senate Republicans are arguing that repealing the ACA’s individual mandate would allow them to reduce tax rates for more Americans without adding to the deficit. The Congressional Budget Office found that repealing the mandate would reduce federal deficits by $338 billion over the next 10 years, which would help Republicans avoid surpassing the $1.5 trillion cap on how much the tax bill can add to the deficit over the same time period. This may make Paul Ryan want to click his heels with joy, but the CBO also found that the mandate repeal would result in 13 million Americans losing health insurance over the next ten years as well as an average insurance premium increase of 10%. Oh, and it could trigger $25 million cuts to Medicaid. 

Perhaps second only to government provided subsidies, the individual mandate is what the GOP hates most about the Affordable Care Act. The mandate requires Americans to buy health insurance, which then in turn lessens the average cost of insurance over time and provides more coverage to disadvantaged citizens. The GOP doesn’t like this. They want to repeal the mandate so they have to cover less people so that they can then in turn cut tax rates. Taxes, after all, help pay for health insurance. They’re trying to justify this desire by saying middle class families would see their taxes decrease, despite the fact that the main benefactors are those who make above $200,000 annually.

The trouble is, we already know that trickle-down economics, supply-side economics, and only-helping-the-one-percent economics don’t work. Unfortunately for most Americans, Paul Ryan has been dreaming of this tax reform since college and Senate Republicans are not in the mood to be fair and impartial. A key facet of the bill would reduce the corporate tax rate from 35% to 20%. This matters most to people like, you guessed it, Donald Trump - people who run corporations and make a large share of their income from investment. People most likely to see their taxes increase are those who make primarily wage-based incomes and are part of smaller family units; AKA, most middle-class Americans. Economic analysis by the New York Times found that, "...roughly one-fifth of the Senate bill’s cuts in 2018 would go to families and individuals earning $1 million or more, and close to half would go to people earning at least $200,000. Between 10 million and 15 million taxpayers earning less than $100,000 a year would pay more than under existing law." If you're an optimist, the diagnosis is that this bill does not do enough to provide tax cuts for the lower and middle classes and favors corporations and the wealthy. A more harsh criticism, such as the one by Tom Perez, slams this bill for skimming money from the middle and lower classes to give the wealthy and top 1% a bigger tax break. Either way, it's especially crucial that the bill in its current form does not pass because of the threat to the Affordable Care Act. Time to get those phones out again.