Nationwide – New Numbers from the Congressional Budget Office show poor Americans would be hurt even more by the Senate GOP tax plan than originally forecast.
The CBO found that those with earnings of more than $100,000 would do quite well. But by 2019, Americans earning less than $30,000 would be worse off than today, and by 2027 most making less than $75,000 would be net losers.
According to Marc Stier, director of the Pennsylvania Budget and Policy Center, like the bill in the House, the Senate bill already heavily favored the rich. But, the Senate bill also would end the Affordable Care Act’s requirement that everyone buy health insurance.
“The additional burden of eliminating the individual mandate and its effect on the kinds of subsidies that low-income people get has made that effect much more dramatic,” he laments.
Republicans argue that ACA subsidies are paid directly to insurance companies, so taxpayers would be unlikely to see any change in their tax bills.
But Stier says eliminating the mandate has consequences. He notes that an estimated 13 million people nationwide would lose their health insurance. And for everyone else, premiums would increase by an average of $860 a year.
“That average includes people young and old,” he notes. “For people 27, 28 years old, it might only be $400 or $500. For people 50 years old, they may be looking at a premium increase of $1,600 a year.”
The Senate bill also would also allow individual tax cuts to expire in 10 years while business and corporate tax cuts would continue.
Stier believes the reasoning behind the tax cuts, giving tax breaks to corporations to encourage investment and create jobs, is flawed. He points out that with profits at record highs and interest rates at record lows, businesses should have no trouble investing.
“They do have trouble finding enough customers because wages have been so stagnant,” he explains. “Cutting taxes for businesses isn’t going to lead to higher investment because it’s not going to lead to more demand for business products. What we really need to be doing is raising wages for working people.”
Andrea Sears, Public News Service