The Senate tax plan will hurt the poorest Americans while handing huge tax cuts to the nation’s wealthiest citizens, the nonpartisan Congressional Budget Office found Sunday in an analysis that undermines Senate Republicans’ claim that their legislation will overhaul the U.S. tax code in favor of the middle class.
Technically, most families making less than $30,000 a year don’t pay income tax. But these people would still be worse off by 2019 under the Senate tax plan, because the plan includes a repeal of the provision that nearly all Americans buy health insurance. That repeal would trigger a domino effect, the CBO found. After premiums rise, 4 million people would lose their health insurance by 2019. Those families would then no longer have access to some of the government subsidies and tax credits that come with insurance.
By 2027, 13 million people would lose their health insurance and its accompanying benefits. Ultimately, the CBO found that everybody who makes less than $75,000 would be losing money under the Senate tax plan over the course of the next decade.
People making at least $100,000 per year, meanwhile, would continue to see massive benefits from the plan.
Republicans, who’ve long opposed the individual mandate, argue that the choice to get health insurance is a personal decision. Kentucky’s Republican Sen. Rand Paul, who declared his support for the bill Monday, said it made sense to end a health care law in a tax reform bill because the individual mandate is clearly “clearly a tax.”
After a report from the nonpartisan congressional Joint Committee on Taxation earlier this month also found that the Senate tax plan would hurt low-income families’ wallets, Pennsylvania’s Republican Sen. Patrick Toomey asked the committee to prepare a report that excluded the effects of repealing the mandate. That analysis showed that every income bracket would see tax cuts in 2023.
If Republicans fail to get this tax plan passed — which is highly likely, since several members of the GOP are skeptical of it — they’ll have to scramble to explain themselves to voters in 2018. It would also mean President Donald Trump will have spent a year in office without passing any major legislation.
As South Carolina’s Republican Sen. Lindsey Graham put it, “If we don’t [pass the bill], that’s probably the end of the Republican Party as we know it.”