Health and Science

Here's what didn't change in the Senate's health care bill: $1 trillion in tax cuts

Key Points
  • The GOP health care bill will have almost $1 trillion in tax cuts.
  • 40 percent of those tax cuts will go to the top 1 percent of earners.
  • Warren Buffet said in May his tax bill would be "about $680,000" lower if the bill becomes law.
Sen. Mitch McConnell.
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The health-care bill the GOP rolled out on Thursday morning will retain the nearly $1 trillion in tax cuts previously proposed, with few minor differences.

This means the Senate health-care bill's tax breaks would go primarily to the wealthy, with 40 percent of savings going to the top 1 percent of earners and 64 percent of savings going to the top 20 percent of earners.

"The tax provisions are pretty much unchanged, except for some implementation dates," Gordon Mermin, senior research associate at the Urban-Brookings Tax Policy Center, told CNBC. "Substantively it's the same as what's passed the House."

In March, the Tax Policy Center modeled the distribution results of the American Health Care Act's tax provisions to find where the $992 billion in tax cuts would end up. There are only "minor exceptions," Mermin said, as the Republican bill proposed Thursday retains the same provisions as the version proposed earlier this year.

The result of the Senate's bill is a time delay for some tax cuts, at most. The Tax Policy Center's table, which can be viewed on their website, is valid for the new bill when analyzed as showing results from 2023 onward.

Warren Buffett said in May the Republican health-care bill would slash his taxes.

"It was huge what they did on cutting taxes for the rich" in the GOP's measure to replace Obamacare, Buffett said on CNBC's at that time. "If there's one clear-cut message that comes out of that bill it is we're going to cut the hell out of income taxes for the rich on investment income."

The tax cuts include a repeal of a 3.8 percent investment tax — such as capital gains — and a 0.9 percent Medicare payroll tax. Both of those apply to individuals earning $200,000 or more a year and couples earning more than $250,000.

Buffett said his personal tax bill would be 17 percent lower under the GOP health measure — about $680,000 on his tax bill of a "little less than $4 million."

"I've had years when it's been a lot more than $680,000. But I'm $680,000 better off if everything else is equal just because of what happened last week," Buffett added.