New Tax Law Benefits Corporations and Wealthy While Putting Health Care and Public Services at Risk According To New Report
Renacci Voted for Tax Breaks for Rx and Insurance Companies, Higher Health Care Costs and Service Cuts for Ohio’s Working Families
Parma – Local advocates and constituents held a press conference on April 17 to educate the public about how the new tax law will impact Ohio families and services they depend on. The new Tax Cuts and Jobs Act became law after passing the House and Senate late last year despite widespread constituent opposition and record-low public approval ratings. Representative Jim Renacci voted against the bill.
The new law provides about $1.5 trillion in tax breaks to individuals and corporations with about two-thirds going to the richest 20% of households this year, and nearly 83% of tax benefits going to the richest 1% by 2027 when the law is fully implemented. The law also permanently cuts the national corporate tax rate from 35% down to 21%, gives companies who offshore profits a discount on taxes and eliminates some taxes on foreign profits.
Advocates at the event released a new report from Americans for Tax Fairness and Health Care for America Now that shows the specific impact of the tax cut package for families in Ohio and compares that impact with tax benefits that health insurance companies and prescription drug manufacturers receive under the same law.
- The richest 1% of Ohio taxpayers—people with an average income of at least $507,230 per year–will receive 27% of the state’s total tax cut.
- The bottom 60% of taxpayers—people with income less than $62,100–will get just 14% of the tax cuts.
- The average tax cut for the richest 1% is $47,510 while the average tax benefit for the lower 60% of Ohioans is $420—just over a dollar a day.
Most health industry companies including the largest pharmaceutical companies like Merck and Pfizer will get massive tax breaks, but will not pass these on to their employees in the form of wage increases or bonuses. The same is true for insurers like UnitedHealth, which will receive $1.7 billion in annual tax breaks but likely not pass these benefits on to customers in the form of lower costs.
On the contrary, because the corporate tax cuts in the new law are paid for with cuts to the Affordable Care Act (ACA), millions will actually see increased costs for coverage. Repeal of a key provision of the ACA in the tax law will increase the number of uninsured people in Ohio by 433,000 and drive up premiums by as much as $1,480 annually for some ACA enrollees.
“Tax breaks for the rich and corporations, especially at this scale, are an expensive luxury. That money has to come from somewhere,” said ProgressOhio Managing Director Monica Moran. “In this case, Republicans have cut the ACA—a law they want to get rid of anyway—to pay for a large portion of the tax cuts, which means that that cost really gets shifted to consumers and states in the form of higher premiums and rising numbers of uninsured people that put a burden on state resources.”
“Instead of more tax breaks that reward prescription drug companies and insurers for decades of gouging customers, politicians in Congress should be making corporations pay their fair share of taxes to expand healthcare, make insurance and prescription drugs more affordable and protect education, Medicaid, Medicare and Social Security,” said Frank Mathews, Frank Mathews, Administrative Director, Communications Workers of America District 4.
The analysis also shows the impact of additional proposed cuts to public programs like Medicaid, Medicare, Social Security Disability Insurance, SNAP and education that President Trump proposed earlier this year to address the $1.9 trillion that CBO (Congressional Budget Office) predicts the tax law will add to the deficit. Trump’s budget proposal will impact millions in Ohio:
- 809,000 could lose health coverage because of the proposed full repeal of the Affordable Care Act. Women, people over 50 and people with pre-existing conditions would lose important protections that stop insurance companies from charging them more. Seniors could also face higher costs for prescription drugs because of a key provision in the ACA that gives seniors in Part D a discount on prescription medicines.
- 224,797 households in Ohio could lose food assistance through SNAP.
- Ohio would lose $3,388,547,140 from highway funding and $795,725,197 from transit funding between 2021 and 2027, resulting also in significant job loss.
- 224,937 of college students could lose federal student aid, 62,720 kids could lose after-school programs and1,340 teachers could lose jobs because proposed education cuts
Speakers at the event including impacted individuals called on Renacci to demand repeal of the new tax law in order to protect these health care, education and public services from more cuts.