The senate has recently come out with its version of the AHCA. Since there are still no provisions about price controls on drugs I do not support it. Despite that it is important that the truth about it be told. Democrats have said that this bill is nothing but a massive tax cut for the rich. The truth is that Democrats will always say that no matter what Republicans do. We have to take a look at the actual taxes that have been repealed to see what happened. Obamacare delayed a lot of the most harmful taxes it required to run until Obama left office so some of the taxes I list here that have been repealed have not taken effect yet. They are mostly scheduled to take effect in the next year or two. As usual it should be the Trump administration and its Republican allies doing this but since they cannot be bothered too it falls to independent bloggers like me to do so.
Tax on Retiree Prescription Drug Coverage
Remember when Democrats tell you that Republicans want to push granny of a cliff? Democrats actually removed some of the benefits seniors had to push thru Obamacare. Seniors used to be able to recoup 28% of what they pay for prescription drugs and companies used to be able to take this as a deduction encouraging them to take on more seniors. This is especially important as seniors could have unique illnesses that generic drugs would not treat. The Republicans returned this benefit to seniors.
Chronic Care Tax
There is a tax deduction available for Americans who have high out of pocket costs. In order to pay for Obamacare Democrats reduced this deduction was reduced. Wealthy people are less likely to have high out of pocket costs. They would already have very good insurance that covers them. It is poorer people that have worse insurance that have the potential to get bigger costs. President Trump and Republicans returned this benefit to them.
HSA Withdrawal Tax
Democrats doubled the penalty to withdraw money from Health Savings Accounts for non-health related expenses to 20% from 10%. The AHCA bill restores the penalty to 10%. Wealthy people would have other sources of funds to draw money from instead of the HSA as that is already going to cost a minimum of 10%. The only people who would need to use this are those who have lower income. Trump and the Republicans return this to 10%.
Tax on Prescription Medicine
Over and above the reduced deductions for seniors the Democrats also levied a tax on prescription medicines. As mentioned seniors and others may have needs that generic medicines cannot fill so this is a direct tax on them. The truly wealthy would also have very good insurance which would probably cover those things already. Republicans have lowered this tax on the poor and middle class.
Surtax on Investment Income
This is the only thing that can be truly considered a tax break for the wealthy. At this point I would ask you to remember that Trump has already proposed that investment income from people who invest for a living be treated as income tax instead of capital gains tax. That already represents a massive increase in the tax liability for investment income. This is something that Republicans proposed not Democrats.
Medical Device Tax
Democrats levied a tax on medical devices to pay for Obamacare. The entire premise behind Obamacare is that when hospitals are given a cost. Like the uninsured packing emergency rooms they would then pass those costs on to the public. Using the very same logic Democrats used to justify Obamacare then this would be a tax on the public as the hospitals pass the costs on to the final consumer. Republicans have repealed this tax.
Medicine Cabinet Tax
As part of their suite of taxes to pay for Obamacare health saving accounts and flexible savings accounts were restricted from purchasing non-perscription over the counter medicines. Health Savings accounts are not limited to the very wealthy. Most of the people who use them are middle class. By limiting their accessibility to medicine Democrats have made healthcare more expensive for them. The Republicans have repealed this.
This is the biggest tax on them all. A tax on all people who do not have insurance. Who is more likely to have insurance a rich person or a poor one? Who is more likely to pay this tax? I think everyone knows the answer to that. Republicans have repealed this and instead rely on insurers to provide competitive options to attract customers.
Employer Mandate Tax
At first glance removing this tax only seems to benefit employers with more than 50 employees. When we take a closer look we see that the number of employees insured from work did not increase after Obamacare took effect nor did the companies pay any new taxes. The companies were already offering health insurance before or were structuring their new hires in such a way that they would not need to be offered health insurance through work.
As you can see most of the taxes that are repealed help the middle and lower income classes. The one thing that does help the rich has been addressed in tax reform. Democrats and their allies in the media hope that everyone is too lazy to look up what taxes have actually been repealed and instead rely on them for the information.