As Senate Republicans' tax-cut bill heads closer to a vote, a nonpartisan analysis has found that it will primarily benefit the wealthy, raise taxes on the poorest Americans almost immediately, add more than $1.4 billion to the deficit and result in 13 million people losing health insurance.
Monday's report by the Congressional Budget Office shows that the proposed bill “gives substantial tax cuts and benefits to Americans earning more than $100,000 a year” — hitting the nation’s poorest citizens particularly hard — and that the legislation would “add an increase in the deficit of $1,414 billion over the next 10 years.”
In addition to actual increases in the tax rate, the CBO score looked at government spending cuts that the bill would trigger and any resulting loss of benefits. Those making less than $30,000 a year would start paying more in 2019, with those earning less than $10,000 a year hardest hit. That's partly due to cuts in Medicaid.
And although the analysis shows that groups making more than $40,000 a year would see a tax cut for three years — after which taxes would rise — the Senate plan would eliminate deductions for medical expenses, property taxes, mortgage interest and state and local taxes. So anyone with higher-than-average costs in those categories could see their taxes go up immediately. By the year 2027, most people earning less than $75,000 a year would pay more.
Of the bill's provision to repeal Obamacare's individual mandate, the report says, "Average premiums in the nongroup market would increase by about 10% in most years of the decade … relative to the CBO’s baseline projected. In other words, premiums in both 2019 and 2027 would be about 10% higher than is projected in the baseline… (t)he number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027."
The bill advanced out of committee on a 12-11 party-line vote on Tuesday. It may be voted on by the Senate this week.