November 13, 2017
Republican Tax Bill is Poison to NYS taxpayers
Despite the Republican leadership’s and President Trump’s assertion of seeking to pass tax reform for the “middle class” the tax reform proposal that comes from the house and the proposal from the Senate released Friday are anything but Middle Class friendly.
15 TERRIBLE THINGS ABOUT THE HOUSE REPUBLICAN TAX PLAN As of Nov. 9, 2017
1. Showers most of the tax cuts on the richest 1% of taxpayers. They would get nearly half (47%) of the tax cuts after 10 years—a tax cut of nearly $53,000 on average. (Tax Policy Center)
2. Gives 75% of the tax cuts to wealthy corporations and businesses. [Joint Comm. on Taxation]
3. Puts corporations over healthcare. Corporate tax rate is slashed from 35% to 20%, losing $1.5 trillion —equal to the cuts Republicans plan to make to Medicare and Medicaid .
4. Puts Wall Street over seniors. Wealthy business owners—including real estate investors like Donald Trump—get a $448 billion tax cut from the drop (from 39.6% to 25%) in the top tax rate for “pass-through” businesses. Republican budget cuts Medicare by $473 billion .
5. A real jobs killer. By eliminating taxes on some foreign profits and slashing the tax rate on others far below the U.S. rate, the plan encourages multinational corporations to outsource more jobs and shift more profits offshore.
6. Hands a $500 billion tax cut to offshore tax dodgers. American corporations have $2.6 trillion in profits stashed offshore on which they owe $750 billion in U.S. taxes. [Institute on Taxation and Economic Policy] Rather than make them pay what they owe, like all the rest of us do, the tax plan will charge them only $220 billion —over a half-trillion-dollar discount.
7. Makes the middle class pay more. One-quarter of middle-income Americans would pay more in taxes by the tenth year because the tax plan repeals or limits deductions that these families rely on. Three in 10 families earning between $55,000 and $93,000 will see a $1,150 tax increase of $1,150 on average. [Tax Policy Center]
8. Makes it harder for states to provide essential services. The plan repeals the deduction for state and local income and sales taxes (SALT). One-third of taxpayers making $50-75,000 use this deduction, as do half of those making $75-100,000 . While the plan will still allow taxpayers to deduct up to $10,000 in property taxes, it will cut SALT deductions by 88% , leading to tax increases for many in the middle class. Eliminating SALT will put pressure on state/local budgets , likely forcing cuts to education, health care, and infrastructure.
9. Helps Donald Trump pay less. The plan repeals the alternative minimum tax (AMT), losing almost $700 billion . Without the AMT, Trump would have paid just a 4% tax rate on $153 million in income one year. But thanks to the AMT, he paid $38 million for a tax rate of 25%.
10. Lets Ivanka and her siblings save billions. The estate tax is repealed after six years, losing $170 billion . The Republican budget cuts education, job training and social services by $200 billion . Under the tax bill only estates worth at least $11 million would pay the estate tax. If Trump is worth the $10 billion he claims, his heirs could inherit billions tax free.
11. Harms families with large medical bills. The plan repeals the deduction families can take for out-of-pocket medical expenses, which mostly benefits the middle class . For families with very high medical costs, the plan’s higher standard deduction will not compensate for the loss of the medical expense deduction, which is claimed by nearly 9 million families .
12. Breaks Trump’s promise to close the “carried interest” loophole. Remember when candidate Trump promised to get rid of this loophole that primarily benefits private equity fund managers? The House plan keeps it in place.
13. Adds $1.5 trillion to the national debt. The plan includes $1.5 trillion in tax cuts that are not paid for by closing loopholes used by the wealthy and corporations. This will balloon the deficit and further endanger funding for Social Security, Medicare, Medicaid, public education and more.
14. Cuts the personal exemption ($4,050 per household member): For a family of three this means $12,150 which eats up the $11,300 increase in the standard deduction.
15. Eliminates assistance to pay for college: by eliminating the deduction for student loan interest, eliminating the lifetime learning credit, excludes the interest on US savings bonds where proceeds are used to pay for higher education and the exclusion of employer provided education assistance.
As predicted, the House Ways and Means Committee passed the House Tax Cut bill out of committee Friday. The next step is to bring the bill to the Floor for a vote. Republicans plan to do that on Thursday, November 16th unless we can stop it. Thus far only Congressman Zeldin, King and Donovan have announced their intent to vote against the tax cut bill being voted on.
As is plain to all this is anything but a middle class tax break. It is a tax giveaway to the very wealthy putting Medicare, Medicaid and Social Security at very real risk.