Richest families in US would get $3.8 billion tax cut if ACA is killed

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A Republican lawsuit to kill the Affordable Care Act would shower the wealthy with billions of dollars.

If a Republican lawsuit to repeal the Affordable Care Act (ACA) is successful, millions of people will lose their health insurance while America's richest families will reap a multi-billion dollar tax cut, according to an analysis released Monday by the Center on Budget and Policy Priorities (CBPP).

The wealthiest 1,400 households — those with incomes of more than $53 million a piece — will see tax cuts totaling $3.8 billion if the ACA is ruled unconstitutional.

At the same time, 20 million people would lose their health insurance and millions more would face higher costs for health care.

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"Striking down the ACA would thus transfer billions of dollars each year from low- and middle-income people (who would lose subsidized health coverage) to high-income households and corporations (which would receive large tax cuts)," the CBPP report stated.

The analysis is referring to a lawsuit challenging the constitutionality of the ACA brought by Texas and joined by several Republican state attorneys general. Rather than defend the landmark health care law that helped millions of Americans acquire health insurance, the Trump administration sided with the plaintiffs, arguing that the court should strike down the entirety of ACA, including some of its most popular provisions.

If Republicans are successful, health insurance companies would no longer be required to cover people with preexisting conditions. Further, young people would no longer be allowed to stay on their parents' health insurance until age 26.

If a court sides with Republicans, those benefits would vanish along with the taxes in the law used to help offset the cost of health insurance subsidies.

Most of the revenue raised to pay for the ACA came from high-income households and corporations "to help pay for Medicaid expansion to low-income adults and premium tax credits that help moderate-income people afford individual market coverage," the report stated.

If the ACA goes away, not only would the richest families benefit, other wealthy households would as well. The analysis found that most of the tax cuts "would go to households with incomes over $1 million, who would receive tax cuts averaging about $46,000 apiece."

Additionally, pharmaceutical companies "would pay $2.8 billion less in taxes each year, even as seniors would pay billions more for prescription drugs because eliminating the ACA would reopen the 'donut hole' gap in Medicare's prescription drug benefit," the analysis found.

Trump and Republicans already doled out massive tax cuts to the wealthiest households with the 2017 Republican tax law. Most of the benefits from that law will go to the richest 1% of earners and wealthy Wall Street corporations.

Published with permission of The American Independent.