For all the attention being paid to the changes in the health insurance exchanges in the House-passed American Health Care Act (AHCA) it is easy to forget: The bill would cut taxes by nearly $900 billion over the next decade, mostly benefitting the highest-income Americans.

The AHCA undoes a pile of Affordable Care Act taxes, nearly all targeted to high-income households and health-related businesses. It would repeal the ACA’s 3.8 percent net investment income tax and its 0.9 percent Medicare surtax on individuals making $200,000 or more and couples with incomes exceeding $250,000. It also would kill the “Cadillac tax” on high-cost employer-sponsored insurance and the ACA’s taxes on health insurers as well as pharmaceutical and medical device firms.   

At the same time, it would dump the ACA’s penalties on people who don’t have insurance and large employers who don’t offer coverage to their employees.  The AHCA also would redesign the tax subsidy for those buying on the individual market: Instead of adjusting those subsidies based on income as the ACA did, the AHCA calculates them mostly on age (though they are phased out for high-income people).

The net effect: The Tax Policy Center estimates that in 2022 (when the changes would be fully effective) the lowest income households would get a tax increase averaging $10. Middle-income households would get a tax cut of $240, or 0.4 percent of their after-tax income. The top 0.1 percent would get an average tax cut of $207,000, increasing their after-tax incomes by 2.6 percent.

Put another way, the highest income 20 percent of households, those making $150,000 or more, would receive 80 percent of the benefits of the tax cuts. The top 1 percent, who will be making $772,000 or more, would get half the benefit, and those in the top 0.1 percent, who will be making $4 million-plus, would get 28 percent.