Tax Policy Fellow
The core of the GOP health bill has always been tax cuts for the wealthy and corporations paid for by cutting provisions that help millions of low- and moderate-income families afford health coverage and care. Senate Republicans are now reportedly considering removing one of their bill’s many regressive tax cuts — repealing the 3.8 percent tax on unearned income — to address concerns that the bill favors the wealthy. “It’s not an acceptable proposition to have a bill that increases the burden on lower-income citizens and lessens the burden on wealthy citizens,” Senator Bob Corker said in supporting the change. But even with that change — which not all GOP senators agree with — the legislation would still fail Corker’s standard by providing an estimated nearly $400 billion in tax cuts from 2017 to 2026 that go overwhelmingly to high-income households and corporations.
These tax breaks include:
As a result, the Senate bill would still fail Corker’s test: it would still “lessen the burden” on higher-income Americans. It would also still dramatically “increase the burden on lower-income citizens,” including both low-income and middle-class households — even if the resources from maintaining the 3.8 percent tax on unearned income were put toward coverage.
In its current version, the Senate bill cuts $1.2 trillion from programs that help people obtain health coverage: $772 billion from Medicaid and $424 billion from subsidies that help moderate-income people afford marketplace coverage. Maintaining the tax on unearned income would fill only a fraction of that shortfall. Thus — with or without repeal of the 3.8 percent tax on unearned income — Senate Republicans will be left with a bill that fundamentally trades health care and coverage for millions of Americans for tax cuts for the wealthy and corporations.