Health and Human Services Secretary-designate, Rep. Tom Price, R-Ga. testifies on Capitol Hill in Washington, Wednesday, Jan. 18, 2017, at his confirmation...
Carolyn Kaster

Republicans don’t want to talk about their health plan’s tax cuts

Updated
In the White House briefing room yesterday, a reporter asked HHS Secretary Tom Price why the Republican health care plan “includes a tax break for insurance executives that make more than $500,000. You said this is about patients. Why is that tax break important for this legislation?”

The Republican cabinet secretary was incredulous. “I’m not aware of that,” Price responded.

The bill really isn’t that long. How the Secretary of Health and Human Services, who presumably read the bill, could be unaware of the provision is difficult to understand.

Around the same time, House Speaker Paul Ryan (R-Wis.) was asked why his reform blueprint includes “a big, fat tax break.” The Republican leader responded, simply, “Read the bill.”

We did read the bill. BuzzFeed reported:
The Republican plan to replace Obamacare includes a tax break for insurance company executives making over $500,000 per year.

Companies can generally deduct employee salaries as a business expense but in 2013 the Affordable Care Act capped the deductions on health insurance executive salaries at $500,000.

The average compensation for top health insurance executives is in the millions. In 2014 the left-leaning Institute for Policy Studies found that this cap generated $72 million in additional tax revenue. But that cap is being eliminated in the new American Healthcare Act unveiled Monday by Republicans. That means the more health insurance companies pay their executives the less they will pay in taxes.
If you voted for Trump because you wanted to see insurance-company executives get a big tax break, this is, of course, great news. For everyone else, however, it’s not quite as impressive.

And while this is a striking provision, in the GOP proposal, it’s really just the start of the tax breaks in the new reform legislation. Vox explained:
It’s reasonable … to ask what there is to like about the proposal. The main answer, for Republicans is Congress, is that it also contains $600 billion in tax cuts — tax cuts that would save the wealthiest 0.1 percent of Americans nearly $200,000 each in a single year, according to a batch of analyses released by the Joint Committee on Taxation on Tuesday. […]

The single biggest tax cut included in the bill is the repeal of the 3.8 percent tax the Affordable Care Act applied to capital gains, dividend, and interest income for families with $250,000 or more in income ($125,000 for singles).

Repealing that tax is a change that, by definition, only helps the rich, or at least the affluent.
At a certain level, this shouldn’t come as a surprise. When Democrats crafted the Affordable Care Act, they intended to distribute benefits and resources in a progressive direction: those at the top would pay more in taxes, while those in the middle and on the bottom would receive more in the form of health security.

Republicans intend to undo the economics of “Obamacare,” which necessarily means going in a regressive direction: giving people at the top big tax breaks, while taking benefits away from everyone else.

It’s a reality, however, that Republicans aren’t exactly eager to acknowledge out loud – Ryan and Price dodged questions yesterday because they know the politics of their plan are awful – but the legislative text is unambiguous.

The larger point, however, is coming to terms with the significance of this aspect of the GOP reform push. MSNBC’s Chris Hayes noted yesterday that the only way to make sense of the Republicans’ health care plan is to see it as “a bill primarily intended to cut rich people’s taxes.”

That’s both true and underappreciated. Why in the world would GOP officials champion a health care proposal that would take away coverage from millions, increase deductibles and premiums, and leave much of the country worse off? It’s probably because Republicans really like cutting taxes for rich people.

For those on the right, this is a feature of the American Health Care Act, not a bug.