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Tuesday June 27th, 2017 9:51PM

GOP health plan: Tax cuts for rich; hits older people hard

By The Associated Press
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WASHINGTON (AP) — The House Republican health care plan backed by President Donald Trump provides billions of dollars in tax cuts for wealthy families and insurance companies, but it hits older Americans hard with higher insurance premiums and smaller tax credits.

In all, the bill provides $883 billion in tax relief by repealing almost all of the taxes enacted under President Barack Obama's Affordable Care Act, according to estimates by the nonpartisan Joint Committee on Taxation, the official tax scorekeeper for Congress.

The vast majority of those taxes targeted the wealthy.

For example, the biggest tax cut in the GOP plan would eliminate a 3.8 percent tax on investment income for high-income individuals and families. Eliminating the tax would save these taxpayers $158 billion over the next decade.

About 90 percent of the benefit from repealing the tax would go to the top 1 percent of earners, who make $700,000 or more, according to the nonpartisan Tax Policy Center.

Another big tax cut would repeal an extra 0.9 percent Medicare tax on wages above $200,000 for individuals and $250,000 for married couples. Repealing the tax would save higher income families $117 billion over the next decade.

The bill also repeals a tax on health insurers, saving them $145 billion over the next decade.

Republicans are eager to highlight the tax cuts as a campaign promise kept.

"Our fiscally responsible reforms will lower premiums over the long term and deliver much-need relief from Obamacare's crushing taxes and mandates," said Rep. Kevin Brady, R-Texas, chairman of the tax-writing House Ways and Means Committee.

House Speaker Paul Ryan, R-Wis., said, the legislation "will provide massive tax relief, dramatically reduce the deficit, and make the most fundamental entitlement reform in more than a generation."

Two House committees have already passed their sections of the bill. The House Budget Committee is taking up the bill Thursday.

GOP leaders have said they plan to have the full House vote on the bill next week, but House Speaker Paul Ryan, R-Wis., wouldn't commit to the timetable when asked about it Wednesday evening.

Democrats complain that the bill robs from the poor to give to the rich.

"They have no idea how to explain stealing $600 billion from working families' health care to give more tax breaks to the richest people in our country," said House Minority Leader Nancy Pelosi, D-Calif.

Sen. Ron Wyden, D-Ore., called the bill "a payday worth hundreds of billions of dollars for the wealthiest and special interests."

Older people who are not yet eligible for Medicare stand to be the biggest losers under the GOP plan — unless they have higher incomes.

Older Americans get hit two ways. The GOP plan would shrink the tax credits they use to help buy insurance and it would increase their premiums because the bill allows insurers to charge more as people age and become more susceptible to health problems.

Wealthier households would benefit under the GOP plan in part because the tax credits are available to people with higher incomes. Under the GOP plan, full credits are available to individuals making as much as much as $75,000 and married couples making as much as $150,000.

The Obama law aimed to help low- to moderate-income families.

The Congressional Budget Office laid out several examples of how people at different ages and incomes would benefit from the GOP plan and current law. The estimates are for 2026, after the bill would be fully phased in.

___

A 40-year-old making $26,500

CURRENT LAW

—Annual premium: $6,500.

—Tax credit: $4,800.

—Cost to the individual: $1,700.

___

GOP PLAN

—Annual premium: $6,050.

—Tax credit: $3,650.

—Cost to the individual: $2,400.

___

A 64-year-old making $26,500

CURRENT LAW

—Premium: $15,300.

—Tax credit: $13,600.

—Cost to the individual: $1,700.

___

GOP PLAN

—Premium: $19,500.

—Tax credit: $4,900.

—Cost to individual: $14,600.

___

A 40-year-old making $68,200

CURRENT LAW

—Premium: $6,500

—Tax credit: 0.

—Cost to the individual: $6,500.

___

GOP PLAN

—Premium: $6,050.

—Tax credit: $3,650.

—Cost to the individual: $2,400.

___

A 64-year-old making $68,200.

CURRENT LAW

—Premium: $15,300.

—Tax credit: 0.

—Cost to the individual: $15,300.

___

GOP PLAN

—Premium: $19,500.

—Tax credit: $4,900.

—Cost to the individual: $14,600.

___

Follow Stephen Ohlemacher on Twitter at: http://twitter.com/stephenatap

  • Associated Categories: Associated Press (AP), AP Online Headlines - Washington, AP Online Congress News, AP Health, AP Business, AP Health - Senior Health, AP Business - Industries, AP Business - Financial Services, AP Business - Personal Finance
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