(Pixabay)
Both the House’s American Health Care Act and the Senate’s Better Care Reconciliation Act would reduce taxation on the wealthy, but do they need or want it?
Whether it is the intent or not, the benefits of the AHCA and BCRA mostly go to the wealthy and the burdens go to the middle class. The wealthy have paid higher taxes under the ACA/Obamacare, much of which has gone to insure those who couldn’t otherwise afford health insurance but didn’t previously qualify for government assistance.
On Forbes.com, Carolyn McClanahan – a physician, financial planner and educator – says no. Her clients – “people who have a net worth of $2 to $10 million – the top 5%” – McClanahan writes, “barely noticed the taxes resulting from the Affordable Care Act and have not needed to make any lifestyle adjustments,” but they have noticed how much insurance costs have gone up for the people who work for them.
While no fan of the ACA, McClanahan says the BCRA “fixes nothing in the health care system, rips insurance away from millions, and continues to provide financial reward to insurance companies and health care providers. All in the name of saving money for the government that will be passed on to wealthy taxpayers,” such as her clients.
Some argue that lower taxes encourages work and re-investment, particularly by the wealthy, but what research there is seems to argue that “the positive relationship between tax cuts and employment growth is largely driven by tax cuts for lower-income groups, and that the effect of tax cuts for the top 10% on employment growth is small.” That’s what Owen M. Zidar Jr. concluded in his 2015 paper “Tax Cuts For Whom? Heterogeneous Effects of Income Tax Changes on Growth and Employment.” That hasn’t stopped commentators from using his paper to bolster both sides of the argument, pro tax cuts for the wealthy and con.
What’s clear is that many more people now have coverage for mental health and substance use disorder recovery treatment than did before ACA because of the ACA’s mandate that more insurance plans offer them as an essential benefit and because of the expansion of Medicaid. Both the AHCA and BCRA would allow states to waive the mandate and reduce available Medicaid funds.
The Congressional Budge Office estimates of the result of these health care acts replacing ACA is that between 22 and 23 million fewer people would have health care insurance coverage in 10 years. And while it would cost less money overall, fewer conditions and treatments would be covered.
That’s far from president Donald J. Trump’s promise of better health care coverage for everybody at less cost.
