Trumpcare will eliminate virtually all of the taxes that Obamacare introduced to expand health care coverage, including the Medicare surcharges that only apply to high earners: 0.9% on earned income and 3.9% on investment income. That in itself is a 16% cut in taxes on investments for a class of people who make lots of money from investments. Health savings accounts will increase the tax breaks available to high-income families. The “Cadillac tax,” which would have affected people with generous health plans, will be pushed back until 2025 (in a transparent bid to improve the bill’s scoring for reconciliation purposes), with the expectation that it will be repealed at some point in the future.
.. Because Trumpcare eliminates the individual mandate, more healthy people are likely to opt out of coverage. This will increase the average actuarial cost of people buying individual plans, which will push up premiums—a transfer from sick people to healthy people.
.. Trumpcare achieves the long-held conservative dream of converting Medicaid into a block grant program, which means that Republican state governments will be able to use the money in ways that are only tangentially related to providing health care for poor people. (Temporary Assistance for Needy Families block grant money, for example, is routinely used to support abstinence programs or premarital counseling services aimed at getting couples to marry.)
.. People will need the same amount of health care no matter what Congress does. If the government pays less for health care, poor people will have to pay more. If they can afford it, Trumpcare is effectively the same as a tax on the poor. If they can’t afford it, it’s even worse. This is as naked an example of class warfare as you’ll see today.
AHCA is a betrayal of all the GOP’s promises on health care
It does the opposite of what they say.
The American Health Care Act, passed today by the US House of Representatives, is a law that fundamentally does the reverse of what its proponents are promising.
Having run a campaign during which he promised to cover everyone, protect Medicaid from cuts, and replace Affordable Care Act plans with “terrific” coverage, Donald Trump is now behind a bill that cuts Medicaid, covers fewer people, and allows states to replace ACA plans with stingier coverage. Having promised repeatedly to protect patients with preexisting health conditions from insurance market price discrimination, Paul Ryan is pushing a plan that removes existing protections and replaces them with hand-wavy and inadequately funded high-risk pools. Having leveraged public discontent with high deductibles and rising premiums, Republicans are pushing a bill that will leave most patients with higher out-of-pocket costs for equivalent plans and bring back skimpy plans with even higher deductibles.
That’s all happening because the GOP is committed to rolling back the taxes that pay for the Affordable Care Act, delivering a financial windfall to high-income families even though Treasury Secretary Steve Mnuchin swore at his confirmation hearings that the Trump administration would not pursue tax cuts for the rich.
.. When Ryan initially rolled out the American Health Care Act, he accompanied it with a Frequently Asked Questions page that offered a firm statement of moral purpose regarding the treatment of patients with preexisting conditions:
That statement is now gone from the House leadership’s website. In search of additional Freedom Caucus votes, Ryan abandoned that commitment and signed on to the MacArthur Amendment that will, in fact, allow insurers to charge higher premiums to sick people.
.. “I’m not going to cut Social Security like every other Republican and I’m not going to cut Medicare or Medicaid,” Trump told the conservative Daily Signal way back in May 2015. “Every other Republican is going to cut, and even if they wouldn’t, they don’t know what to do because they don’t know where the money is. I do.”
.. That fall, his promises got even bigger. “I am going to take care of everybody,” he told 60 Minutes. “I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.”
.. The bill his party is now pushing will cover fewer people, charge higher premiums, raise copayments, and raise deductibles.
The reason is that the AHCA takes a ton of money out of the health care system in order to provide a $600 billion tax cut,
.. While running for president, for example, Barack Obama promised that his health plan would lead to lower premiums for average families. When pressed, his policy team would gladly clarify that what he meant was premiums would increase at a lower-than-expected rate. That was a reasonable promise, but not nearly so politically appealing as the much grander promise the candidate made in his speeches. And the policy of misleading people worked well enough until he was actually in office, signed a major health care bill, and then people discovered that their premiums were not, in fact, going down.
‘Middle-Class Tax Relief’ Is a Hoax
The top 20 percent already pony up 84 percent of income taxes.
The mantra of both parties has been that tax relief should be directed at the middle class while the rich need to pay “their fair share.” But, in terms of the personal income tax, that mantra already has been realized. The middle class pays hardly any tax at all, while the preponderance of the burden falls to the rich.
.. Another question is: what do middle-income Americans, or even low-income Americans, owe their government and their society in the form of at least modest taxes designed to sustain the governance that all citizens count on? Leave aside income redistribution. What about the military defense of the nation? What about federal infrastructure? What about law enforcement? What about immigration enforcement? These are things that all Americans need. Shouldn’t all Americans make at least some contribution, even if it is nominal, to supporting them?
.. Some note, inevitably, that those who don’t pay income tax still pay Social Security payroll taxes. True. But those are taxes collected specifically for their own later Social Security payments
Trump’s Tax Proposal Is Just a Symptom of the Disease
No wonder this administration can’t get anything done. It specializes in wishful thinking.
This conveys the impression that the administration cares a lot about cutting taxes for very wealthy people and corporations, and considers the other elements of the plan to be filler, to be sketched in brief if at all.
.. Tell hundreds of thousands of government employees that they need to make a more business-friendly environment, and you’ll rapidly discover the terrifyingly myriad ways in which such a directive can be interpreted by individual minds. No, what you actually have to do is create rules to follow, all of them spelled out in mind-numbing minutiae.
Detail makes enemies.
Let’s revisit the personal deduction eliminations, for example. Going to get rid of the deduction for people with high medical expenses? Enjoy the frantic phone calls from patient groups. How about educational savings accounts? Are they going away? Stand by for the firestorm of indignation from middle-class parents. If the Trump administration actually tries to enact its plans, one by one, many of its ideas, so pleasing in vague summation, will become flesh, encounter political resistance, and die an early and gruesome death.