Poor Americans would lose billions of dollars worth of federal benefits under the Senate GOP tax bill, according to a new Congressional Budget Office report.
This is largely because the legislation would eliminate the individual mandate, which requires nearly all Americans to get health insurance or pay a penalty. This would result in 13 million fewer people having coverage in 2027, the CBO found.
Many of the folks who would forgo coverage would have lower or moderate incomes and would have qualified for Medicaid or federal help paying their premiums or out-of-pocket health expenses, CBO found.
Those earning less than $40,000 a year would be worse off in 2025, when the bill’s provisions would mostly be in effect, according to the report released Sunday. On the flip side, those with higher incomes would enjoy tax breaks.
The Senate legislation would make multiple changes to the tax code, but the vast majority of individual tax cuts would expire after 2025. These include changing the rates on individual tax brackets, nearly doubling the standard deduction, eliminating personal exemptions, expanding the child tax credit and repealing the state and local tax deduction.
In 2027, after the individual income tax provisions expire, more middle class Americans will get hit, the CBO found. Only those earning more than $75,000 will see their federal tax levy drop.
Other analyses by independent think tanks have also found that the bill’s benefits are weighted toward those higher up the income ladder.
Republican lawmakers have criticized the CBO’s analysis, saying the bill doesn’t cut federal support of Medicaid or Obamacare’s subsidies.