By KENNETH KAUS

This is in response to the commentary “Quick cuts hurt needy the most” (March 10).

There’s no definitive evidence that $880 billion is being taken directly from Medicare to fund tax cuts for the wealthiest in 2025, based on available data up to March 10. However, the claim likely stems from recent Republican budget proposals, and I’ll break down what’s known.

The House Republican budget resolution, passed on Feb. 25 with a 217-215 vote, directs the House Energy and Commerce Committee to cut at least $880 billion in mandatory spending over 10 years (2025-2034). This committee oversees both Medicare and Medicaid, among other programs.

The resolution is part of a broader plan to reduce federal spending by $1.5 to $2 trillion while extending the 2017 Tax Cuts and Jobs Act (TCJA), which could cost $4.5 trillion or more over a decade and disproportionately benefits higher earners. Posts on X and some analyses, like those from the Center for American Progress, frame this as slashing Medicare or Medicaid to “pay for tax cuts for the rich,” but the resolution itself doesn’t explicitly target Medicare or specify the $880 billion comes solely from it.

Medicare cuts are politically sensitive — Donald Trump has repeatedly pledged not to touch Medicare, Medicaid, or Social Security, including in a February 18, 2025, Fox News interview. Analysts, like Robin Rudowitz from KFF, suggest that if Medicare is off-limits, the “large majority” of the $880 billion would likely come from Medicaid instead, as it’s the next biggest program under the committee’s purview. The Congressional Budget Office (CBO) noted on March 5, that achieving $880 billion in cuts without touching Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP) is nearly impossible, given other programs under the committee (e.g., energy, FCC) only account for about $381 billion over 10 years, leaving a $600 billion gap.

Medicaid, covering nearly 80 million low-income Americans, is a more likely target. Proposals like work requirements ($109 billion in savings per CBO) or reducing federal matching rates (up to $604 billion if ACA expansion funds are cut) could contribute to the $880 billion. The federal government spent $609 billion on Medicaid/CHIP in fiscal 2022, versus $747 billion on Medicare, per the Tax Policy Center, making Medicaid a sizable pot to dip into. However, the resolution leaves the exact cuts unspecified — committees will hash out details later in reconciliation.

The narrative of “$880 billion from Medicare for tax cuts” seems to conflate Medicare and Medicaid or assume Medicare isn’t spared despite Trump’s stance. Posts on X, like one from @karlykingsley on March 2, claimed the $880 billion is from Medicaid specifically, not Medicare, to fund tax cuts.

Without final legislation, it’s speculative to pin the full amount on Medicare alone. The TCJA extension’s cost ($4.5 trillion) far exceeds the $880 billion, meaning other cuts or borrowing would also be needed, diluting the direct “Medicare-to-tax-cuts” link.

So, no hard proof exists yet that $880 billion is being taken from Medicare specifically. The budget framework suggests Medicaid is more vulnerable, but the process is ongoing, and the final split between Medicare, Medicaid, or other programs remains unclear.

Tesla paid $48 million in federal income tax in 2023 on $3.1 billion of U.S. income, according to data from the Institute on Taxation and Economic Policy (ITEP) based on Tesla’s annual financial report. This equates to an effective federal tax rate of approximately 1.5% for that year.

I don’t have access to SpaceX’s exact 2023 federal tax payment, as it’s a private company and doesn’t publicly disclose detailed tax filings like public corporations such as Tesla. However, I can piece together some context based on available data and estimates.

SpaceX’s revenue in 2023 was estimated at $8.7 billion, according to Payload, driven by its launch services and Starlink expansion. As a private entity, its federal income tax depends on profits, not just revenue, and we don’t have public profit figures. The U.S. corporate tax rate is 21%, but effective rates often drop due to deductions, credits, and tax strategies — common among Musk’s companies. For comparison, Tesla paid $48 million in federal income tax on $3.1 billion of U.S. income in 2023, a 1.5% effective rate, per the Institute on Taxation and Economic Policy (ITEP).

Posts on X have claimed SpaceX and Tesla together paid $2.3 billion in taxes in 2023, though this isn’t verified and might include payroll, state, or other taxes, not just federal income tax. If true, and assuming Tesla’s $48 million is accurate, SpaceX could have paid around $2.25 billion across all tax types.

However, this is speculative without official breakdown. SpaceX’s extensive government contracts–over $17 billion from federal sources since 2015, with $3.7 billion in fiscal 2024 per USAspending.gov–suggest significant U.S. income, but tax obligations could be offset by R&D credits or losses carried forward from earlier years.

Lacking SpaceX’s 2023 tax return, a reasonable estimate for federal income tax might range from tens of millions to a few hundred million, depending on profitability and tax planning. For a firmer number, I’d need non-public financials.

Kenneth Kaus is a Dunkirk resident.