Nearly half of the tax benefits from the Senate's Obamacare replacement bill would go to the top 1 percent of households by income, according to a new analysis.
About 45 percent of the benefits from the Republican health-care bill's tax cuts will go to households making $875,000 or more, according to the analysis by the Urban Institute and the Brookings Institution's Tax Policy Center released Monday. That group would see an average rise in after-tax income of about 2 percent, versus a 1 percent increase for the lowest 20 percent of households and 0.4 percent for middle-income Americans.
The Senate proposal, the Better Care Reconciliation Act, like a similar bill that passed the House, repeals an array of Obamacare taxes including the 3.8 percent tax on net investment income. It takes the 0.9 percent Medicare surtax off the books in 2023 and delays the so-called Cadillac tax on high-cost employer plans until 2026, among other tax-related measures in the plan.
The Tax Policy Center breaks down how much of the tax cut would go to each American income group.
Source: Tax Policy Center
In a report Monday, the Congressional Budget Office said the Senate proposal would reduce federal revenues by $701 billion. Savings of $1.02 trillion — much of that from scaling back Medicaid spending — would lead to a deficit reduction of $321 billion over a decade, according to the CBO.
When the bill was unveiled, Democrats immediately slammed the plan's tax provisions, with some claiming that the GOP described a tax cut as a health-care bill. Senate Minority Leader Chuck Schumer said last week that "Republicans want to give a tax break to the wealthiest Americans."
The GOP aims to follow the passage of a health-care bill with a tax reform plan that slashes corporate and income tax rates. The White House has contended that it seeks middle-income tax relief, though some analyses of President Donald Trump's campaign tax reform plan showed that it could benefit wealthy Americans the most.
The Tax Policy Center notes that the analysis "excludes health insurance tax credits, which under current law mostly benefit low- and middle-income households."
The analysis of taxes in 2026 follows the CBO report projecting the bill's effects through that year. The office estimated that the Senate bill would lead to 22 million more Americans uninsured.
Senate Majority Leader Mitch McConnell's office and the White House did not immediately respond to requests to comment on the analysis.
CBO: 22 million more people to lose insurance by 2026 under Senate health-care bill