House Republicans approved the Tax Cuts and Jobs Act on November 16, and the Senate is expected to vote on its version of the tax code overhaul this week. But a new analysis from the nonpartisan Congressional Budget Office (CBO) released yesterday (November 26) shows just how much the Senate reform would harm the most vulnerable Americans if it goes into effect on January 1. Here’s the breakdown:
- People who earn less than $30,000 annually would pay more in taxes by 2019. Those who earn $40,000 or less would be net losers by 2021, and the same can be said for people earning less than $75,000 by 2027.
- Millionaires and people who earn $100,000 to $500,000 would pay less in taxes.
- The plan would add $1.414 trillion to the deficit over the next 10 years. Then it would add up to $5 billion a years for each of the following four decades.
- It would repeal the individual mandate, which requires taxpayers to pay a penalty if they do not secure health insurance. This would result in 4 million people leaving health insurance rolls by 2019. That number rises to 13 million by 2027.
- Health insurance premiums for people who buy their own coverage would increase by about 10 percent.
- It would reduce the top corporate tax rate from 35 percent to a flat 20 percent, decreasing government revenue by $1.329 trillion in the decade ending 2027.
There are more than 23 million people of color living in poverty in the United States, per 2016 data. The CBO and the Joint Committee on Taxation previously analyzed how the tax plan would impact specific spending programs that they depend on. They found that households that make less than $50,000 would be the beneficiaries of less federal spending, and by 2021, there would be:
- $18 billion less spending for Medicaid
- $4 billion less spending for cost-sharing reduction payments
- $1 billion less spending for the Basic Health Program
- $4 billion more spending for Medicare because of changes in payments to hospitals that serve a disproportionate share of low-income patients
Read the full CBO report here.