New Health Care Plan Could Be a Huge Boost to the Wealthy

New Health Care Plan Could Be a Huge Boost to the Wealthy

Out with the old and in with the new. You might say that has been the calling card of the new presidential administration since Donald Trump took office. From immigration reform to healthcare, and from tax reform to federal government budget cuts, the country is in the middle of some sweeping changes. Of course, one of the first moves the president made after he took office was to sign an executive order regarding the Affordable Health Care Act, aka Obamacare. Since then, President Trump, his staff and Republican lawmakers have been busy creating a new national healthcare plan.

The Beginning of Tax Reform?

Recently, House republicans revealed that plan, called the American Health Care Act, and President Trump was quick to praise it. However, as one might expect it has not been received with universal approval. One of the biggest complaints is that the plan will basically serve as another huge tax break for the wealthy. At issue are the tax hikes that the Affordable Care Act placed on the wealthy. Those tax hikes helped pay for healthcare for many of the nation’s taxpayers who are in the lower- or middle-class. Under the new plan, those tax hikes that hurt the wealthy have been removed. Of course, the big issue has been who will lose their healthcare coverage if the new plan takes affect? But this new act could also serve as the first real stepping-stone to tax reform under Trump and the republican-led Congress.

Billions at Stake

The fact is, billions of dollars are at stake here, and if this is just the first of many tax cuts, what else could be in store? Also being asked: will only the nation’s wealthy continue to see all the benefits? Under the Affordable Care Act, any individual making more than $200,000 a year ($250,000 for couples) had to pay an additional 0.9 percent surtax on those wages. Additionally, investors in the highest tax bracket had to pay an additional 3.8 percent surtax on capital gains. By eliminate In fact, the top 1 percent, those earning $699,000 or more, would see a tax cut of about $35,000 a year, at least.

How Will the New Plan Be Paid?

While the rich would get richer, the problem according to opponents of the new plan is that federal revenue would take a huge hit, thus creating an even greater deficit for our country. So, while the wealthy would no doubt enjoy their increased revenue under the new plan, the question remains, how will the government pay for this new act? Some argue that the only way to do it will be for the government to borrow money. That, of course, increases our deficit, which in theory hurts our economy. There is one other possibility, which is also a huge concern for many middle-class Americans. That is the government would simply have to decrease the level of healthcare assistance they receive. Almost no one wants this to happen but if this new Act is passed, something will have to give.

//time.com/money/4693417/obamacare-replacement-gop-health-care-taxes/

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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

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