April 20, 2017--Tax Scam

I'm dense so it's taken me awhile to figure out why the Republicans so passionately want to
"repeal and replace" Obamacare. Actually, some of the most conservatives want only to do the repealing.

I got swept into believing some of the rhetoric. Obamacare is deeply flawed. True. It does not allow most people to keep their doctors, true; and it is not containing the rise in the cost of either medical care itself or healthcare insurance. Also true.

But, after a little time passed and the Republican talking points were countered, it became clear that the Paul Ryan American Health Care Act is not about healthcare but about taxes--a critical step toward his plan to cut and reform corporate and income taxes.

Here's the math--

In a March 22nd Forbes Magazine posting (not a socialist publication) it was reported that contained in the final version of the proposed bill, after all the deal making with the House of Representatives Freedom Caucus and White House, the nonpartisan Congressional Budget Office concluded that the plan would result in an $600 billion tax cut over the next decade, with at least $274 billion of the cuts going directly to the richest 2%.

Further, Medicaid would be cut, again over the decade, by $880 billion, making it more difficult for low-income taxpayers to secure insurance.

Though from a healthcare perspective it would be a crisis for low- and middle-income people--the CBO also estimated that these cuts would mean that 24 million would lose their current coverage--from a tax-cut perspective it would be a bounty. Again, with the top 5% benefiting the most from the GOP version of tax reform.

Obamacare does include two tax surcharges for high earners--

For couples filing jointly, if their adjusted gross income is $250,000 or higher there is a 0.9% Medicare surcharge and a 3.8% surcharge on net investment income, with the latter being income from certain types of dividends and capital gains.

The Ryan plan calls for the elimination of these two taxes for very high earners.

If this bill were to pass (and although it was set aside last month it is still a glimmer in Paul Ryan's eye and seems to have the support of the president, who feels the need to get at least something, anything done--even something this harsh and regressive) then Congress and the president could move on to what really interests them--massive tax cuts for the wealthy. Paid for largely, and here's the perversely brilliant part, by repealing the two Obamacare tax surcharges. Doing this would yield $1.48 trillion, which would "pay for" most of the additional tax cuts in a manner so as to make then seem "revenue neutral."

Again, this healthcare shell game is not about healthcare but tax cuts.

The claim, of course, is that cutting taxes for the wealthy is really about helping the middle class, because if you cut "job creators'" taxes they will invest in businesses that generate high-wage jobs.

The only problem with this claim is that it's untrue--the massive Reagan tax cuts and the even larger Bush tax cuts did not boost the economy or create jobs.  What was created were massive increases in the national debt--nearly tripling during Reagan's time and doubling under George W. Bush.

In contrast, the debt after Clinton's eight years increased by just 32% and during Obama's two terms, after inheriting a collapsed economy, it went up by 68%.

I am embarrassed to admit that it has taken me this long to finally figure out what is going on and what all the congressional healthcare machinations are about--tax cuts.