Asian Americans will feel brunt of hidden realities of GOP's tax reform

FOR MANY PEOPLE, it's hard to get past the talking points to find out what the real impact of the Republican tax reform bill will have on individuals and their families. The tax bill passed by both houses of Congress Wednesdy (Dec. 20) is supposed to be about pocketbook issues, but hidden in the 500-page bill are measures that will hurt Asian Americans and Pacific Islanders. 

In the end, Social Security, Medicaid and Medicare -- the real targets of the GOP -- are at risk.

Instead of a real middle-class tax cut, the overwhelming majority of the benefits of this bill — an astounding 83% — go to the top 1% over the next decade. With corporate profits at an all-time high, this plan permanently lowers the corporate tax rate and increases taxes on 57% of middle-class Americans over the next decade. 

In states with a high number of Asian/Americans, including California, New York and Hawaii, many families will also see a tax increase as a result of changes to the state and local tax deduction. Coincidentally, they also overwhelmingly voted for Democrats in 2016.

Health care

Unable to repeal the Affordable Care Act after over 70 attempts, the Republicans sought to sabotage the ACA by taking away its primary funding mechanism.

Donald Trump gloated Wednesday (Dec. 20) when he pointed to the healthcare changes contained in the tax bill, saying the elimination of the Affordable Care Act's individual mandate amounts to a repeal of Obamacare.

"The individual mandate is being repealed, that means Obamacare is being repealed because they get their money from the individual mandate," Trump said.

Uh ... no. As usual, Trump is wrong. The bill doesn't repeal Obamacare, but it does weaken it considerably. Potentially, over 1.2 million AAPI enrollees in the ACA could be adversely affected.

“In order to include tax loopholes for the wealthy, this bill removes a crucial element of the Affordable Care Act – the individual mandate—and will undoubtedly destabilize health insurance markets and cause millions to lose coverage,” said Kathy Ko Chin, president and CEO of the Asian Pacific Islander American Health Forum.

The loss of the mandate means younger, healthy people will think they don't need insurance and will thus, opt out. 

Many people pay insurance premiums for years and never file a claim. In the case of the ACA, this can lead younger and generally healthier people to think they´re wasting money and cause them to cancel their coverage. In the event they suffer a loss, however, they must pay the full cost themselves. But, if you are young, you think you're invincible and you're willing to take that risk.

When anyone buys an insurance policy, you´re buying protection. You´re protected against unexpected medical costs, whether you ever actually use the coverage or not.

With the expected loss of younger people essentially supporting the system, insurance companies will have to raise their rates to the point where over 13 million people will no longer be able to afford health insurance. 

AAPI have always had a favorable view of the ACA. It's difficult to determine why this is so but some say people are attracted to the ability to keep young adults (up to 26 years of age) under the family coverage and the fact so many AAPI have small businesses that can't afford the expensive private insurance plans but can afford the ACA.

The available data suggest that Asian Americans have obtained health insurance through the marketplaces created by Obamacare at a higher rate than other groups. Thus, if Obamacare were repealed, Asian-Americans might see their dramatic gains in health insurance coverage reversed.

The ACA has helped to reduce the national uninsured rates for Asian Americans, Native Hawaiians and Pacific Islanders by 59%, the greatest reduction of any racial or ethnic group. Before the ACA, many groups, such as Koreans, Cambodians, Pakistani, and Bangladeshi Americans had uninsured rates above 20%. 

Immigration

In a press conference before convening a cabinet meeting Wednesday, Trump rambled on about the Damned Wall, need to cut out "chain migration" that allows immigrants to bring over their family, and he expressed his disdain for a "visa lottery."

“They’re not putting their best people in the lottery,” he said of some unspecified countries. “It’s common sense . . . They put their worst people into the lottery.”

As onerous as those proposals are, they had nothing to do with the just passed tax bill. Perhaps Trump just wanted to rile up those voters who are having second thoughts about him because the tax changes would benefit Trump and his rich pals but are still xenophobes.

However, the bill does impact those tax filers who use the Individual Taxpayer Identification Number — most of whom are undocumented. They would need to provide Social Security numbers for each child in order to claim the refundable part of the credit, which kicks in when the credit exceeds the filer's total tax liability. The Senate version would require an Social Security number for the regular credit as well.

According to Samantha Vargas Poppe of the Latino advocacy group UnidosUS, the change would directly impact about a million undocumented children. But it could also hurt those born in the United States whose non-citizen siblings are no longer eligible for the credit. That income hit would impact the whole family.

In addition, the House bill tightens up the rules for the Earned Income Tax Credit in such a way that immigrants covered by the Deferred Action for Childhood Arrivals program will no longer be able to receive the credit when their work authorization expires. The Trump administration announced in September its decision to terminate the program, which means those immigrants will lose their protected status over the next few years unless 
Congress intervenes.

"Instead of passing a clean DREAM Act for undocumented youth at risk of detention and deportation, the GOP continues to prioritize the insatiable greed of corporations and billionaires at the expense of those fighting for their lives," said Kim Geron, 1st vice president of Asian Pacific Americans Labor Alliance. 

Social safety net at risk

"Congressional leaders have acknowledged the incredible $1.5 trillion deficit caused by this bill and have already promised to close that deficit by attacking programs that millions of Americans are relying on to be able to eat and count on coverage for their children through SNAP and Medicaid," said APA Health Forum's Chin. 

"It is a shameful day that our leaders in Washington have chosen to prioritize tax cuts on the backs of low- and middle-income Americans.”

The tax bill will have a devastating impact on millions of working families. The wealthy and corporations benefit the most immediately. An analysis by the nonpartisan Tax Policy Center found that 83 percent of households in the top 1% would receive a tax break in 2018 with an average benefit of $193,380. For the middle 20 percent of earners, the average tax cut would be $930. Over half the bill's total benefits would go to the top 10 percent of earners.

In the longer term, the bill lays the groundwork for future attacks on the poor, disabled, elderly, and other vulnerable Americans. The bill will escalate the federal deficit (estimates range from $1.4 trillion by the Congressional Budget Office to over $2.2 trillion by the Center for Budget and Policy Priorities), and the Republicans will use the increased debt and the reduced tax as the excuse they need to defund safety net programs like Medicaid, Medicare, and Social Security.

"Congressional leaders have acknowledged the incredible $1.5 trillion deficit caused by this bill and have already promised to close that deficit by attacking programs that millions of Americans are relying on to be able to eat and count on coverage for their children through SNAP and Medicaid," said Chin. "It is a shameful day that our leaders in Washington have chosen to prioritize tax cuts on the backs of low- and middle-income Americans.”

“This is one of the greatest transfers of wealth in our nation’s history,” said Doreena Wong, Director, Health Access Project Director at Advancing Justice-Los Angeles. “This bill pays for huge tax cuts for the wealthiest Americans and large corporations by increasing the burden of working families. It would also dismantle the Patient Protection and Affordable Care Act (ACA) by repealing the individual mandate, reducing health care for 13 million Americans and raising premiums by an average of 10 percent.”

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