From the Pennsylvania Budget and Policy Center (http://www.pennbpc.org):
The Senate tax cut bill is an assault of economic and political equality as well as Medicare and the Affordable Care Act.
Some of the worst features of the Republican tax proposals are well known — and they’re explained in more detail below. But the Senate tax bill is especially bad because it will cut Medicare and is one more attempt to repeal the Affordable Care Act without a replacement.
Go to https://actionnetwork.org/letters/say-no-to-the-senate-tax-bill to tell our Representatives to OPPOSE the tax bill if it comes back for a vote in the House from a conference committee with the terrible provisions added by the Senate. (Actually, just urge them to OPPOSE the entire bill—theirs and the Senate’s).
The Senate Tax Bill Repeals Key Provisions of the ACA and Cuts Medicare
The Senate bill repeals the individual mandate to purchase health insurance. The result is that 13 million fewer people nationwide and 500,000 fewer people in Pennsylvania will have health insurance by 2027.
And starting in 2019, those who buy health insurance on the individual market will pay far higher premium. A 27 year-old will pay $621 more per year; a 40 year-old will pay $758 more and a 60 year-old will pay $1,617 more. A family plan for a middle aged couple with two children will be over $2,000 more.
The result is that much of the tax cut received by middle class families in 2019 will be eaten up by the health insurance premiums. And by 2027, middle class families that buy health insurance on the individual market will be out of luck because their tax cuts will have expired and they will have to bear the whole burden of higher insurance premiums.
The Senate bill also will lead to an automatic cut of $25 billion in Medicare next year and a a $400 billion cut over ten years.
Only the 1% and Corporations Benefit From This Bill
This is one more way in which only the top 1% and major corporations benefit from the Senate tax cut plan and everyone else is hurt.
In 2019, the average member of the top 1% will receive a tax cut of $42,210 or 2.3% of their average income of $1.8 million. An average family in the bottom 60% of families will receive a cut of only $360 or only 1% of their average income of $34,100. By 2027, when most individual tax cuts expire the top 1% will still get an average tax cut of $7,040 a year while the bottom 60% pay, on average $100 more each year in taxes.
Why do the top 1% still benefit in 2026? Because they are the ones who own our corporations and the Senate bill is primarily about giving unnecessary tax cuts to wealthy, huge corporations. They receive most of the benefit of tax cuts, even though, once we take into account loopholes, the effective rate of corporate taxation is already at the same level as other advanced countries. The law also cuts taxes for pass-through businesses like hedge funds and real estate developers owned by the 1%.
Corporations Don’t Need a Tax Cut
We don’t need to reward corporations and other businesses to generate economic growth. Since 1952 corporate taxes as a share of all taxes have fallen from 5.9% to 1.9%. At the same time corporate profits as a share of the economy has risen from 5.5% to 8.5%. Business profits are near record highs, as are corporate savings while interest rates are near record lows which means that businesses have little trouble finding funds to make additional investments.
This is no time to give tax cuts to corporations and the wealthy who have seen their incomes skyrocket or to repeal the ACA. It’s time to reward hard working lower- and middle-income Americans who have seen their wage stagnate.
For more details about the Senate tax bill go to the PBPC overview of it here.
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