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Republican Megabill’s Tax Cuts for Millionaires Are Financed by Taking Health Insurance From 4.7 Million People
Recent data confirm a key choice at the heart of the harmful Republican megabill: tax cuts for the wealthy partially paid for by taking away health care coverage from millions of people. The tax cuts for millionaires in the law — averaging $80,000 per household — will cost the same as the health care cuts that will take health insurance away from 4.7 million people by 2034. Each $80,000 tax cut for one millionaire is the fiscal equivalent of taking health insurance from four people and reducing benefits for many others.
The recently enacted law prioritizes huge tax breaks for the wealthiest people at the expense of millions of people’s health and well-being: it contains more than $1 trillion in cuts to Medicaid and Affordable Care Act (ACA) marketplaces. This is the opposite of the approach taken by legislation like the ACA, which paid for health care coverage expansions in large part by raising taxes on the wealthy.
The Congressional Budget Office (CBO) estimates that health care cuts in the megabill will take health insurance away from 10 million people by 2034. That figure rises to 15 million when combined with other harmful ACA marketplace rule changes and, unless Congress acts to extend them, the expiration of enhanced premium tax credits at the end of the year, which help people afford ACA marketplace health insurance. The number of people without health insurance will grow between now and 2034, as some of the cuts to health care coverage in the law occur in later years and take time to take effect.
At the same time, we estimate that the bill provides a $890 billion tax cut to millionaires over the decade based on data from the Joint Committee on Taxation (JCT). Looking specifically at 2033 — the last year for which JCT provides data — we find that the tax cut for millionaires totals $90 billion. In 2034 — the year by which CBO estimates the law’s cuts to coverage will cause 10 million people to lose health insurance — the cut to health care totals $190 billion. (These are the two closest years provided directly by JCT and CBO that actually overlap, since JCT's calendar year 2033 estimate includes three months of fiscal year 2034 — the same fiscal year for which CBO provides coverage loss estimates.)
Congressional Republicans therefore could have avoided 47 percent of the cut to health care at the end of the decade by forgoing cutting taxes for millionaires and achieved the same fiscal outcome. This suggests that 47 percent of the reduction in the number of people without health insurance — 4.7 million people — and reduced benefits for many others is attributable to the decision to cut taxes for millionaires.
An even starker way to think about this decision is that the average tax cut for millionaires in 2033 is about $80,000 per household, while the reduction in health care spending per person losing health insurance is about $20,000. (These per-person cuts from people losing health insurance are actually overstated because they include the fiscal savings from the many others who will keep their health insurance but face cuts to their health benefits and reduced access to care.) This means that the tax cut for each millionaire is the fiscal equivalent of four people losing health insurance plus others losing benefits or utilizing fewer services.
A better template for tax and health care legislation involves the opposite approach, like that of the Affordable Care Act: expanding and improving health insurance coverage while raising taxes on the wealthiest people in the U.S.
