A certain beneficiary of the Republican congressional delegation’s promise to repeal the Affordable Care Act (ACA) — widely known as Obamacare — will be the 400 richest households in the United States.
Repealing the ACA eliminates two Medicare taxes that currently fall only on high-income taxpayers. The 0.9% Hospital Insurance Tax on income over $200,000 ($250,000 for married couples) and the 3.8% tax on investment and other unearned income would deliver average tax savings of $7 million to each of the 400 highest income households. These 400 taxpayers report annual income of at least $300 million, and the total tax cut for this group would shave $2.8 billion in annual tax receipts.
The data were reported Thursday by the Center on Budget and Policy Priorities (CBPP).
The CBPP noted other implications of ACA repeal:
- All the approximately 160 million U.S. households with annual incomes less than $200,000 would get no benefit from the elimination of the two taxes.
- The total $2.8 billion annual tax cut to the richest 400 households is roughly equal to the value of premium tax credits that 813,000 Americans in the 20 smallest states and the District of Columbia would lose if the ACA is repealed without a replacement.
- Only 0.4% of households with annual incomes greater than $1 million would reap 80% of the benefits from repealing these two taxes.
- More than three-quarters of the average annual income of $318 million for the 400 richest households comes from capital gains, dividends and taxable interest income.
- The tax cuts would raise the annual incomes of the top 400 households by nearly 3% after federal income taxes are paid.
The CBPP report is available at the nonpartisan research and policy institute’s website.