Trump’s Contradiction

One of President Trump’s major initiatives has been to “repeal and replace” President Obama’s Affordable Care Act (ACA) with the American Health Care Act (ACHA). On March 6, 2017, the Henry J. Kaiser Family Foundation published a summary of the proposed American Health Care Act.

This replacement of the Affordable Care Act puts an emphasis on tax credits, rather than direct subsidy, for those who cannot afford health care insurance, and cannot obtain it via current federal programs, such as Medicare, Medicaid, etc., or from their employers. Tax credits are regressive, since they are tied to the Federal Income Tax, which is also regressive. The Federal Income Tax is a graduated income tax (the wealthy pay a higher percentage of their incomes). However, the wealthy are eligible for more tax deductions, enabling them to pay less tax, making it a regressive tax. Adding tax credits to the list of deductions currently available will give the wealthy an opportunity to pay less tax, since the credit will be a percentage of the taxpayer’s income.  Beginning in 2020, this will become a flat tax credit. This will make the ACHA even more regressive, since everyone will receive the same percentage tax credit, but, due to their lower income, it will be less meaningful to the lower class.

The AHCA will also encourage the use of Health Savings Accounts (HSAs). These HSAs allow taxpayers to contribute money to their HCA before the money is taxed. The money is then deducted from your taxable income, according to The Motley Fool’s Guide to the Health Savings Account, written by Selena Maranjian, and published on October 1, 2015.  Again, wealthy people have a higher taxable income, they benefit more from HSAs.  

This new act also favors wealthy people by eliminating the tax penalty for large employers that do not provide health benefits, according to The Henry J. Kaiser Family Foundation publication as of March 6, 2017.

Republicans have been attempting to reduce funding for Planned Parenthood clinics for a quite a while. The new health care act will do this by eliminating Federal Medicaid funding for these clinics. Obviously, this will negatively affect low income people who need these services. Although this prohibition will only last for one year from enactment. It will also exclude any plan that provides abortion from qualification, except for those that save the life of the woman, or in cases of rape or incest.  

There are many other provisions in the act that benefit the wealthy and penalize low income people. In a Letter to the Editor of the Bucks County (PA) Courier Times, published on March 17, 2017, Laura Kinnel lists some of these:

“Millions stand to lose coverage with the cessation of the Medicaid expansion option. A smaller but still sizable number would no longer be able to afford coverage when tax credits that make it possible for them to purchase plans are reduced. Subsidies that help to reduce deductibles and co-pays for those with household incomes between 100 percent and 250 percent of the federal poverty level would be eliminated. Insurers would be allowed to charge older Americans five times as much as younger Americans. (The current limit is three times as much.) “  

President Trump appealed to the general population, as opposed to the wealthy or big businesses. This proposed replacement to the Affordable Care Act contradicts his campaign rhetoric. When will those who voted for the President realize that they have been fooled?

Alliance Tax Advocate . Free Tax Consultation. Call Us Now 1.888.315.8269 #help #crookedhillary #clinton #jillnothill #gop #whereshillary #edtech #economy #ohio #nevertrump #strongertogether #trump2016 #maga #thursdaythoughts #trump #uniteblue #entrepreneur #tax #Taxes #IRS #pjnet #tcot #college #taxreturn #taxrefund #personalfinance #money

help crookedhillary clinton jillnothill gop whereshillary edtech economy ohio nevertrump strongertogether trump2016 maga thursdaythoughts trump uniteblue entrepreneur tax Taxes IRS pjnet tcot college taxreturn taxrefund personalfinance money

Recommended Posts