GOP Secret Rush To Repeal Obamacare: It's About Tax Cuts For Wealthy

WASHINGTON, DC — Senate Republicans are working behind closed doors to draft their own alternative to Obamacare, with hopes to vote on a bill before the July 4 congressional recess. But if, as is expected, the bill produced closely resembles the legislation passed in the House of Representatives, the major feature of the bill will not really be about health care at all. It will be about taxes.

President Obama's Affordable Care Act, known popularly as Obamacare, raised taxes on wealthier Americans while funding health coverage for lower income people with subsidies and Medicaid spending. By undoing Obamacare, Republicans aim to roll back the taxes while slashing subsidies and scaling back Medicaid expansion. (For more information on this and other political stories, subscribe to the White House Patch for daily newsletters and breaking news alerts.)

Much of the tax cuts go to people who are already quite wealthy. Obamacare's taxes — a 3.9 percent tax on income from investments such as capital gains and a 0.9 percent increase on payroll tax — only affect individuals making more than $200,000 a year and families making more than $250,000.

Fewer than 2 percent of individuals and 4 percent of families would see a benefit from these tax cuts.

According to an early analysis by the Tax Policy Center, a private think tank, the distribution of the tax cuts disproportionately benefits the wealthiest Americans; meanwhile, the cuts in spending the House bill imposes leaves poorer households with fewer resources:

In addition to the personal tax cuts, the bill would also cut taxes on health insurance companies, prescription drug makers and medical device manufacturers. It also provides more tax deductions for people's medical expenses and health savings accounts while delaying the "Cadillac Tax" that targets the most expensive health insurance policies.

Some critics of the GOP health care plan have excoriated its proponents for these cuts. Wisconsin Democrat Rep. Mark Pocan said in March that under the plan, "$600 billion worth of tax breaks will go to the wealthiest in this country."

As Politifact explained, this was only partially true, since some of the tax benefits go to companies or affect middle-income people with health plans through their employers. However, it's certainly clear, as the Tax Policy Center laid out, that the people with the lowest incomes would see few benefits from the tax cuts while having their benefits slashed.

In total, the plan would provide about a $600 billion tax cut over 10 years — and this is before the Republicans move on to their tax-reform plans.

“We want a very big tax cut but cannot do that until we keep our promise to repeal and replace the disaster known as Obamacare,” President Trump said in Louisville, Kentucky, in March. He left out the fact that GOP efforts to roll back Obamacare are in themselves "a very big a tax cut."

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