The House GOP’s Proposals To Repeal ACA Taxes Would Largely Benefit High-Income Households

The House Republican proposal to repeal or delay the tax increases in the Affordable Care Act, including the revenue-raisers and the individual and employer mandate tax penalties, would overwhelmingly benefit high-income households, according to new estimates by the Tax Policy Center. Forty percent of the benefit of those tax cuts would go to the highest-income one percent—those making more than $772,000 in 2022.

In 2022, when the proposed changes would be fully effective, the lowest income households would get an average tax cut of about $150, or about 0.9 percent of their after-tax income. Middle-income households would get an average tax cut of about $300, or roughly 0.5 percent of their after-tax income. At the same time, the highest income one percent of households would enjoy an average tax cut of more than $37,000, or 2.1 percent of their after-tax income, and those in the top 0.1 percent (who will make $3.9 million or more), would get $207,000 on average, boosting their after tax incomes by 2.6 percent.

TPC’s estimates do not include the effects of replacing the ACA’s income-based insurance subsidies with the House GOP’s proposed age-based refundable tax credits, which TPC  and the Urban Institute hope to model soon.  

TPC analyzed proposals to repeal the 0.9 percent additional Medicare tax and the 3.8 percent net investment tax for high-income households, the various excise taxes on health providers and insurers, and the tax penalties for uninsured individuals and employers that do not offer coverage.  Its analysis also includes the proposal to reduce the floor on the medical expense deduction and the measure to delay the effect of the so-called Cadillac tax on high-cost employer sponsored health insurance plans until 2025.