(This article has been updated with additional information and references.)
Republicans plan to ram a tax bill through Congress before Thanksgiving. We need to give this as much protest as we gave to their efforts to repeal the Affordable Care Act. Call, write, and fax every day between now and Thanksgiving.
Never before has a major, complex tax bill been announced and brought to the floor of both houses of Congress without committee work and hearings. This smacks of a huge cover-up and certainly violates Senator McCain’s principle that the Senate should act on “regular order.” Say that in your messages to him.
Republicans admit they are giving big tax breaks to corporations and some other favored businesses. They are also eliminating the estate tax — a tax that hits only about 5000 Big Estates per year: Only those worth over $5 million. These breaks for corporations and the wealthy create a huge hole in the federal budget. To try to fill that hole, the House of Representative, on a party-line vote, already passed a budget that cuts funding for Medicare and Medicaid.
But those inhumane cuts aren’t enough to cover their breaks for the wealthy, so Republicans are scrambling for dollars in the tax code itself. Here’s some of what they are doing:
- Cutting the tax deduction that teachers can take for supplies they purchase for their classrooms.
- A tax credit of $13,750 for parents who adopt — designed to cover their legal expenses — will be gone.
- Student loan interest will no longer be deductible.
- Medical expenses that exceed 7.5% of income are currently deductible: That will be gone, hurting the elderly in nursing homes, parents whose children have a catastrophic illness, and others of the most vulnerable.
- Alimony payments will no longer be deductible.
- Now, if you sell a home that you’ve lived in for 3 of the last 5 years, you don’t have to pay capital gains on any profit up to $250,000 ($500,000 for a married couple). That will change to 5 of the last 8 years under the Republican plan. Who this hurts: People who have unexpected job changes, or family disruptions, death, or illness that require a move.
- Currently, losses from theft or events such as flood, fire or tornado that exceed 10% of adjusted gross income are deductible. That gets repealed.
- The cost of moving 50 miles or farther to take a new job has been deductible, but that would end.
- Companies could no longer claim a credit of 25% of the expenses for employee child care.
- A credit for 50% of the cost of clinical testing of drugs for rare diseases and conditions would be repealed.
- Graduate students will be required to pay taxes on the value of their tuition waivers, forcing all but the independently wealthy from school
- You won’t be able to deduct the cost of having your taxes prepared by someone else.
- Some people will lose their mortgage interest and property tax deductions.
The list goes on, but you get the idea. In order to give tax breaks to the wealthy and corporations, Republicans are hurting average Americans.
Wait, didn’t Paul Ryan and Donald Trump say everybody is getting a tax cut? Individual rates and credits will vary, but what’s clear is that any reductions for the middle class will be phased out in 6 years while cuts for corporations and Big Estates are permanent.
Republicans have argued for years that lowering taxes for corporations helps people because corporations will create jobs and raise wages. But we’re already at full-employment and corporations already have excess cash, which they are not using to raise wages or invest in capital. They are paying dividends to shareholders. Why are Republicans giving away more cash from the federal budget? This is “Trickle-Down” redux and we know it doesn’t work.
There is no tax relief for 90% hard-working small business owners. But “passive” owners of pass-through entities get a huge tax cut.
Furthermore, hidden in the Republican bill are ideological gifts for the far right like allowing churches to talk politics from the pulpit without risk to their tax-free status and recognizing fetuses as children.