When somebody worth $65.5 billion talks about taxes and financial policy, most people listen because it’s fairly easy to conclude the person doing the talking knows what they’re talking about. When that somebody is Warren Buffett, everyone listens.
At the annual Berkshire Hathaway shareholder’s meeting, mega-investor Buffett, currently ranked at number three on the Forbes 400 list of the world’s richest people, explained why the American Health Care Act is bad policy for working-class Americans.
“It [Trumpcare] is a huge tax cut for guys like me,” Buffet said.
The billionaire business mogul went on to explain, “And when there’s a tax cut, either the deficit goes up or they get the taxes from somebody else. That is a problem this society is having trouble with and is going to have more trouble with.”
As if Warren Buffett needed to be fact-checked, his remarks are accurate. Under the version of the American Health Care Act passed last week in the House of Representatives, most of the taxes enacted to pay for the healthcare subsidies under the Affordable Care Act (more commonly known as Obamacare) would be eliminated.
The taxes in question are proportionate to income, which means the wealthiest Americans are currently being required to pay more to subsidize health coverage for those who cannot afford it. Because more people with coverage equates to fewer uninsured patients whose costs are then distributed among the insured anyhow, the premise is that overall costs should decrease.
The specific taxes being targeted by Trumpcare are a 0.9 percent payroll tax on earnings and the other is a 3.8 percent tax on net investment income for any individual making over $200,000 or a couple making more than $250,000 per year. According to The Tax Policy Center, eliminating these taxes on the wealthy will cost approximately $274.9 billion from 2017 to 2026.
Buffett further explained the need to keep American healthcare costs at competitive levels, describing the costs as “the tapeworm of American economic competitiveness.”