October 6, 2009
Middle-Income Families, Not Poor, Stand to Benefit the Most from Ways and Means Bill
Washington, DC, October 6, 2009 -- If H.R. 3200, the health care reform bill that cleared the House Ways and Means Committee, becomes law, an additional $122 billion would be redistributed from the top-earning 30 percent of the income spectrum, for a total income redistribution of about $1.4 trillion, according to new analysis from the nonpartisan Tax Foundation.
The biggest beneficiaries of HR 3200's redistribution would not be low-income families, but middle-class families, especially those making between $65,704 and $112,721, who would see an average benefit of about $1,900. In fact, even in the 60 percent to 70 percent income group, earning up to $141,101, the average family would gain almost $1,000.
"Families in the middle of the income spectrum would benefit the most - an average of about $1,900 per family - from the greater income redistribution embedded in the House health reform plan," said Tax Foundation President Scott Hodge, author of Number 193 in the Tax Foundation Fiscal Fact series, titled, "Distributional Effects of the House of Representatives' Health Care Reform Bill." The Fiscal Fact is available online at http://www.taxfoundation.org/publications/show/25271.html.
Among the highest earners, those in the top-earning 1 percent of families, the additional amount redistributed away from each family would be $88,729 in 2016, the first full year in which the health care legislation would be in effect.
Even without health care reform, families in the top-earning 10 percent will be redistributing more than $1 trillion down the income scale in fiscal year 2016.
Lower-income families would see their redistribution increase somewhat - by an average of about $595 per family for the bottom 10 percent.
The findings are the latest from the Tax Foundation's "fiscal incidence" project, a long-term research effort to include federal spending along with taxes in calculations of income redistribution.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
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To schedule an interview, please contact Natasha Altamirano, the Tax Foundation's Manager of Media Relations, at (202) 464-5102 or naltamirano@taxfoundation.org.