Facing the possibility that congressional Republicans and President Donald Trump will repeal the Affordable Care Act, Democrats are trying to warn Americans about some of the consequences. Sometimes, though, such warnings have gone too far.
One example is a statement by Sen. Claire McCaskill, D-Mo., in a Jan. 23, 2017, interview on MSNBC’s Morning Joe.
During a discussion of the women’s march held a few days earlier, McCaskill said Democrats needed to shine a light on potential policy changes by the Trump administration and the GOP-controlled Congress. As an example, she cited how the tax code could change if lawmakers repealed the ACA.
"Not one dime of the tax cut that they are going to enact with the repeal of Obamacare will go to people who make under $200,000," McCaskill said.
We’ll take a closer look at this statement, with the acknowledgement that we don’t know the final shape of a congressional repeal of the law (or, for that matter, whether one will happen at all). Of course, neither does McCaskill. We do know, however, that McCaskill is wrong to say that a repeal would only give tax cuts to the rich.
Taxes on the rich
While the Affordable Care Act is best known for its provisions aimed at expanding health insurance coverage, it is also a major tax bill, since its authors sought to provide ongoing revenue sources to support other portions of the bill.
When we checked with McCaskill’s office, they said that McCaskill was referring to a provision of the bill that imposed a 0.9 percentage point payroll surtax for individuals earning $200,000 or married couples earning $250,000, along with a 3.8 percent tax on unearned income for higher-income taxpayers.
This is indeed the biggest tax increase in the law. Shortly before it was passed, the Joint Committee on Taxation -- the bipartisan congressional panel that analyzes all proposed tax changes -- projected that these provisions would raise $210.2 billion in revenue over the 10-year period between 2010 and 2019.
We found another tax provision that would also benefit wealthy Americans -- one that limits the deductibility of executive compensation in the health insurance industry to $500,000. The Joint Tax Committee projected that this provision would generate much less revenue -- $600 million over 10 years.
The grand total for these tax cuts for high-income Americans, then, is nearly $211 billion.
This makes it clear that a full repeal of the Affordable Care Act’s tax provisions would enact a significant tax cut for Americans earning more than $200,000 a year.
Taxes on everyone else
However, the law imposed other taxes that would hit more than just the wealthy.