First, the obvious: the current House tax cut (let’s not lie and call it “reform”) will change before it gets a floor vote. And, the Senate’s plan will differ substantially from that House version.
Still, it’s not too early to call this process what it is, cruelty camouflaged by hypocrisy.
Slash away the lies about making corporate rates more competitive or that the richest Americans will still pay their fair share and you’re left with a harsh truth – the Republican tax cut movement aims to hurt common people.
As has been reported, the tax deduction for medical expenses in excess of 10% of income will be repealed under the House plan. [current rule: https://www.irs.gov/individuals/changes-to-itemized-deduction-for-medical-expenses ] Yes, most families spend less than a dime from every dollar on health care. Yet poor health can quickly shove an upper income family into poverty. Many folks owe hundreds of thousands of dollars for medical care and are forced to spend a third of their income or more on payments to hospitals, for prescriptions and to doctors. For an already struggling portion of our population, eliminating the deductibility of high medical costs taxes them for being sick. Taking money out of their pockets may lead them to skip doctor appointments, not fill prescriptions and get pushed into bankruptcy court. (Medical bills remain by far the largest expense pushing people into bankruptcy. [ https://www.fool.com/retirement/2017/05/01/this-is-the-no-1-reason-americans-file-for-bankrup.aspx])
Please remember that most Americans pay the greatest portion of their medical costs in their last years and days: eliminating the medical expense deduction therefore hits seniors hard.
Even more inhumane, to offset much of the costs of the tax cuts Congress plans to snip apart safety net programs.
For example, the House Ways and Means Committee – which originated the tax cut plan – is expected to find $52 billion in cuts, over a decade, from budgets for Medicare, Social Security Disability, unemployment compensation and Temporary Assistance for Needy Families. The Education and Workforce Committee needs to find $20 billion to cut, mostly from student loan programs. [ https://www.washingtonpost.com/politics/house-gop-unveils-budget-plan-that-attaches-major-spending-cuts-to-coming-tax-reform-bill/2017/07/18/6e68b679-c63a-4dd1-a3da-e191636946ad_story.html?utm_term=.c2ad06e1b534 ] As I’ve mentioned before, food stamps and Medicaid get slashed too as part of the movement.
So, the old, the sick, the poor and the hungry suffer to make these tax cuts possible.
According to multiple sources, the top 1% of American taxpayers collect 48% or more of all the “cut” tax money. [ https://itep.org/housetaxplan/ ] Here in Missouri, the top 1% of taxpayers would save almost $42,000 a year. [ https://itep.org/housetaxplanmo/]
What about the middle class? Well, taking away the deductibility of state and local taxes, ending personal exemption allowances and other lost deductions make it a crap shoot. While perhaps as many as a third of middle class families could see their federal tax bill increase, other might see a small drop. One estimate places the typical tax savings for the average Missouri middle class family at $2.11 a week (while the richest save $805 a week). [ https://itep.org/housetaxplanmo/ ] Remember though that the “savings” get paid back with a lot of interest in cuts to Medicare and other programs senior middle class folks need.
As the AFL-CIO warns, “we can expect Republicans to demand more budget cuts the hurt working people in the future.” [ https://aflcio.org/2017/11/2/top-reasons-why-republican-tax-bill-bad-working-people ] We pay now and we pay later.
Despite the rhetoric, these tax cuts are just another way to help the rich get richer. Calling the movement a middle class tax cut is basic hypocrisy.
And, yes, I ran the plan against my tax return: I would pay more. (I’d be against the cuts even if I got that $2.11 a week.)
Submitted by Glenn Koenen, WCD Member