Are you middle class enough to deserve a tax break?
Something fascinating happened during the most recent rewrite of the Obamacare repair bill: Its authors tried to define who is middle class enough to be deserving of a big tax handout.
When a draft of the bill leaked late last month, it looked as though everyone who didn’t get health insurance from an employer or government program would get a tax credit to help buy coverage. But the bill that Republican leadership introduced this week now limits full credits to single people with $75,000 of income and under or married folks who make $150,000 or less. The credits phase out from there at higher income levels. House Republicans referred to those potential recipients with their six figures in earnings as “middle income.”
So while we await word from the Congressional Budget Office on just how much lower-income people might lose under the current version of the bill (compared with the existing Affordable Care Act) and ponder the nearly $600 billion in savings that the wealthy will reap if the proposed tax cuts stick, we should also stop and ask ourselves an inconvenient question that lingers in nearly every debate over tax breaks: Just how long do we want to keep subsidizing people whose incomes seem quite healthy?
Whenever we’ve asked this question in the past, we’ve often used people’s earnings as our baseline for capping tax benefits. There’s not much consideration of region, demographics (aside from age) or net worth. That can be a problem, given how much geography, discrimination, debt and inheritance can influence our financial lives. Meanwhile, most major tax breaks come with entirely different definitions of deserving.
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