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Senate Health Care Bill 'A Win For Middle Class,' Says ATR

by Mike Godfrey, Tax-News.com, Washington

12 July 2017


A prominent taxpayer advocacy group has defended the tax cuts in the Senate's healthcare reform bill, saying that they will benefit middle class American families.

In an op-ed piece for The Hill, Americans for Tax Reform (ATR) said the Better Care Reconciliation Act (BCRA) has been subject to unjust criticism from the media and does not represent merely a "giant tax cut for the rich." ATR said that, instead, "the BCRA is a huge win for taxpayers, especially those in the middle class."

According to ATR, the repeal of Obamacare's individual mandate represented an income tax cut, which would be equivalent to USD2,000 for a family of four. It said that in 2014, eight million families were subject to the tax penalty, of which most were middle class.

Another measure in the BCRA that ATR cited as beneficial was the lowering of the threshold at which families could claim a tax deduction for medical bills. Under Obamacare, a tax deduction is only available if medical bills exceed 10 percent of adjusted gross income. "As a result, 10 million families with an average annual income of USD53,000 pay USD200 to USD400 in higher income taxes every year," it said.

The BCRA would reduce the threshold back to 7.5 percent. The Senate's bill would also eliminate taxes on Health Savings Accounts and Flexible Spending Accounts, which are tax-advantaged savings accounts, as well as allowing these accounts to be used to pay for over-the-counter medications.

ATR argued that health insurance taxes ultimately hit middle-class consumers and had increased premiums by USD5,000 over a decade.

Finally, ATR said that Obamacare taxes have had a wider impact on economic growth. It said that the 3.8 percent net investment income tax hits many small businesses organized as pass-through entities and its repeal would help improve the economy generally. "Repealing this tax could increase wages by almost USD400 a year and create 133,000 new jobs," the group said.

TAGS: tax | investment | small business | business | insurance | health care | United States | individual income tax | Tax

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