Top 1% would see big tax cut with ACA repeal
- If Republicans go through with plans to repeal the ACA, wealthy U.S. households could see a significant tax cut while lower-income Americans face higher taxes, a new analysis by the Tax Policy Center shows.
- The center estimates the top 1% income bracket would get a tax cut averaging $33,000. Taxes for the top 0.1% would drop on average $197,000.
- The lowest earners would see their taxes rise by $90.
Debate about repealing Obamacare usually focuses on the 20 million people who would lose health insurance. But the law also includes new taxes on the rich to help subsidize health insurance for lower-income people who purchase coverage on ACA exchanges. One of these is a 3.8% tax on investment income over $200,000.
Other tax provisions established by the ACA include so-called Cadillac tax on high-cost employer-sponsored health plans and a 0.9% payroll surtax on high earners.
The nonprofit Tax Policy Center, which provides analysis of tax issues and policy, concludes that scuttling Obamacare would translate to a super-sized tax cut for the super rich.
“Most low-income households would see no change at all in their taxes,” Howard Gleckman, a senior follow at the Tax Policy Center, writes. “But about 7 percent would get a tax cut of about $1,200 on average while 4 percent would face a very big tax hike, averaging nearly $2,900 — mostly because they’d lose the benefit of the premium subsidies.”
- Tax Policy Center Repealing the Affordable Care Act Repeal Would Cut Taxes For High Income Households, Raise Taxes Fro Many Others
- Tax Policy Center Tax Policy Center: T16-0283 – Repeal of ACA Tax Provisions by Provision, 2017
- Vox Obamacare repeal means a $197,000 tax cut for the 0.1 percent
- Forbes Repealing Obamacare Would Mean A Tax Cut For The 1% And A Hike For Low-Income Households