The Senate health-care bill would give the wealthy the biggest tax break in over a decade, according to an analysis.
The Better Care Reconciliation Act would reduce tax revenue by $700 billion, according to an analysis by the Tax Policy Center. Forty-five percent of those tax cuts will go to the top 1 percent of earners, and 67 percent of the benefits to the top 20 percent.
Of course, the rich pay most of the taxes. So any tax cuts at the federal level would naturally benefit the wealthy. And many argue the bill doesn’t cut taxes, it merely removes tax hikes from the Affordable Care Act.
Yet the nature of the health-care bill, which is similar to the House bill, loads a disproportionate share of gains to the wealthy — on both a dollar and percentage basis.
The legislation would repeal the tax hikes imposed by the ACA. That includes killing the 3.8 percent net investment income tax (paid on dividends, interest and capital gains) and the 0.9 percent Medicare payroll tax surcharge. Both are aimed at people with incomes of $200,000 or more.
Overall, the Senate bill would cut annual household taxes by an average of $670 a year. But the differences among income groups is vast.
The bottom 20 percent of earners would get a tax cut of about $180, or 1 percent of their after-tax income. Middle-class earners (who make between $55,000 and $93,000) would see a tax cut of $280 or about 0.4 percent.
The top 1 percent of earners, who under the Tax Policy Center definition make $875,000 or more, would get an average tax cut of $45,000, or 2 percent of their income. The richest earners, or the top 0.1 percent, those who make $5 million or more a year, would get an average tax cut of $250,000 — representing a tax cut of 2.5 percent.
Billionaires could see even bigger gains. Warren Buffett said that some of his friends would be saving $10 million or more if the bill passes.
“You could entitle this, you know, Relief for the Rich Act or something,” he told PBS.