Institute on Taxation Issues Statement on Tax Cuts in Health Care Bill

WASHINGTON, July 13 -- The Institute on Taxation and Economic Policy issued the following statement by Executive Director Alan Essig regarding the revised health care bill released today by Sen. Mitch McConnell, R-Ky.:

"The GOP continues its dogged attempt to unravel the Affordable Care Act under the guise of 'fixing' our health system despite multiple Congressional Budget Office reports indicating millions stand to lose health care coverage. It's is not obvious that the outcome of this bill would be much different from the previous fiasco of a bill in which CBO projected 22 million would lose coverage.

"However, Sen. McConnell and his team now tell Americans that this bill is more focused on health care because they have dropped several tax cuts for the rich that were in the previous legislation. For example, the previous bills included a provision that repealed a tax on the investment income of people who earn more than $200,000 ($250,000 for married couples).

"But as Sen. McConnell tried out this particular argument on the public, his counterpart in the House of Representatives, Paul Ryan, told reporters that repealing the investment income tax would be an important part of tax reform, the next major legislation that Republicans plan to take on.

"This is not surprising. As we have explained already, repeal of the investment income tax paid by the rich is part of the broad tax proposals released by the Trump Administration in April. In other words, Republicans plan to provide this tax break for the rich one way or another. If it is not as part of their health bill, then it will be part of their tax reform bill.

"Further, even if Senate Republicans have dropped the largest tax cuts for individuals from their health bill, the legislation still includes several unwarranted breaks for health care insurers, pharmaceutical companies, and other businesses, and a new tax break for people with health savings accounts that will undoubtedly mostly benefit wealthy taxpayers.

"No matter how you look at it, this Congress is laser focused on providing tax cuts for those who least need them."