This week, the Senate is expected to vote on a bill that increases taxes on Mainers by 2027, increases health premiums for older Mainers by over $3,000 in rural areas, and triggers devastating cuts to Medicaid and Medicare as early as next year. This same bill will endanger fundamental health and security programs that seniors rely on and will also require Maine seniors to pay more in federal taxes.
According to data from the Institute on Taxation and Economic Policy, 57% of Maine seniors will pay more in taxes as a result of the permanent personal income tax changes in the Senate bill. The remaining 43% of seniors will see no tax impact from these changes. That means that Maine seniors will not get any tax cut from the Senate’s tax bill once fully implemented. In fact, Maine seniors will receive a $100 tax increase on average by 2027.
Seniors who pay a significant share of their income in property and state income taxes will also be hard hit. That’s because the Senate tax bill eliminates the state and local tax deduction that allows seniors to deduct their property and state income taxes from their federal taxes.
But the Senate tax bill will do more than raise taxes for seniors. It will also increase health insurance premiums for everyone and shift more health care costs to seniors by triggering cuts to Medicare and Medicaid.
Nationwide, the partial repeal of the Affordable Care Act in the Senate bill is projected to increase health insurance premiums by about 10 percent on average. But insurance companies vary premium costs significantly based on age and geography. A 60-year-old Mainer in Washington County can expect to see a $3,000 annual increase in premiums which is significantly higher than the national average. Because of Maine’s aging population and rural geography, a disproportionate share of Mainers will be particularly hard hit by provisions of the Senate bill that harm seniors, especially those that increase health care costs.
All in all, the Senate bill is a bad deal for Maine seniors. It is also fiscally reckless adding $1.5 trillion to the federal debt by 2027. That means that the children and grandchildren of current seniors will ultimately be responsible for paying for the unaffordable and upside-down tax cuts contained in the Senate bill.
The real beneficiaries of the Senate tax bill are clear and they aren’t Maine seniors. Instead, it is the top 1%, profitable corporations, and wealthy foreign investors who win big. In fact, the net tax break for wealthy foreign investors is nearly three times larger than the tax break for all Americans. And, by 2027, the top 1% of American households will walk away with a $9,000 tax cut on average while Americans making less than $90,000 would see their taxes go up on average.
The Senate tax bill needs to be scrapped. It reflects misplaced priorities and will hurt Maine seniors.