ACA:Killing tax on the wealthy by shifting it to the middle class could cause political problems. So
...shift it to the dirt-poor instead!!
http://acasignups.net/17/03/06/problem-killing-tax-wealthy-shifting-it-middle-class-workers-could-cause-political-problems
Mon, 03/06/2017 - 4:05pm
One of the most controversial aspects of the GOP's "Basement Bill" (aka the #DeplorableCareAct) until now is that it was supposed to replace the current funding sources for the ACA (including a 3.8% tax on investment income and 0.9% Medicare payroll tax for the wealthy) with a tax on 10% of the premiums paid by those receiving employer sponsored insurance...namely, tens of millions of middle-class workers.
As you may recall, according to the Center for American Progress's analysis of an earlier draft version a couple of weeks ago, the original idea was to replace most of the ACA's funding mechanisms (including over $800 billion in various taxes/penalties, $346 billion of which was supposed to come from the taxes on the wealthy noted above) with a) kicking the 15 million people currently on Medicaid via ACA expansion off their policies, and b) a single "Cadillac tax on steroids" which would tax 10% of employer-sponsored policies (at the time, CAP estimated around 38 million people would be hit with around a $700 average bill, though this has shfited around since then).
As the CAP analysis noted, not only would this have meant sticking 38 million mostly middle-class Americans with the bill (and screwing over 15 million low-income Americans) purely in order to line the pockets of the super-rich with an average $7 MILLION tax cut, but doing so would still leave a massive financing hole, not that this worried the GOP's pretty little heads.
However, this plan is causing a huge political uproar for obvious reasons, so it appears that the GOP has come up with a brilliant solution:
The latest version of the bill, dated March 6, also removes a controversial cap on the tax exemption for employer-sponsored health insurance. That provision almost certainly would have sparked opposition from business groups, and Democrats had already pilloried it as an unseemly tax on health benefits.
BRILLIANT!!
My initial conclusion was that the GOP had decided to "solve" this problem by simply not funding their plan at all. No tax on middle-class workers, presto, problem solved!
However, it's even worse than that; apparently they do plan on "funding" it after all...by massively slashing non-expansion Medicaid by another $370 billion over the next decade. Of course, that includes a huge chunk of the funding for nursing homes for the middle class, but that's a whole other topic.
So, to summarize:
The ACA is funded in large part by taxing the wealthy and super-wealthy with a relatively small tax on their jaw-droppingly huge pile of wealth.
The GOP's prior plans were funded by kicking 15 million off of Medicaid, reducing everyone else's tax credits by 36%, and taxing the middle-class.
However, that would include tens of millions of voting middle-class people, so they've decided to simply screw tens of millions more poor people instead by slashing funding on non-ACA Medicaid even further still.
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