An immense tax giveaway to the rich will hurt everyone else. Here’s how.
To pass their immense tax giveaway to the rich, Republicans need to ensure their plan would add no more than $1.5 trillion to the deficit over the next decade. To do so, they’re cutting billions of dollars in tax benefits to people trying to raise children, pay for college, buy a home or invest in renewable energy.
That is why taxes would go up for about 45 percent of middle-class taxpayers by 2026 under the House bill, according to an analysis by The Times. By contrast, the people in the top 1 percent of income will get an average tax cut of $64,720 a year by 2027, according to the Institute on Taxation and Economic Policy. Even the congressional Joint Committee on Taxation concludes that the tax cuts are heavily tilted toward the rich. Yet, the Republicans may take the knife to even more middle class benefits, because the Congressional Budget Office said on Wednesday that the bill would overshoot the $1.5 trillion target by nearly $200 billion.
If the bill exceeded the $1.5 trillion deficit threshold, it would have to be considered under rules requiring 60 votes in the Senate for passage, rather than a simple 51 vote majority. But whether the provisions in the bill are procedural necessities or just incredibly meanspirited, these are some ways they could hurt your family if you:
Are planning to adopt a child: The bill eliminates the adoption tax credit, which is worth $13,570 per child to parents dealing with adoption procedures that can cost tens of thousand of dollars. This would offset $3.8 billion in tax cuts over 10 years — maybe not much in a federal budget of $4 trillion a year, but every dollar counts!
Have or develop chronic illnesses: Republicans want to get rid of the medical expenses deduction, which is primarily used by families grappling with serious health problems. Nearly nine million taxpayers deducted $84 billion in such expenses from their taxes in just 2015; eliminating it would offset about $182 billion in tax cuts over 10 years.
Have dependents you need to take care of: Under the proposal, dependent-care benefits that families receive from employers for things like day care or elder care, including flexible spending accounts, will become taxable. More than one-third of private sector workers and more than half of state and local government workers had such benefits in 2014, according to the Bureau of Labor Statistics. Currently up to $5,000 a year in such benefits are exempt from taxes. This provision would offset $6.5 billion in tax cuts.Want to move for a better job: The bill would repeal the deduction for moving expenses when families take a new job that is at least 50 miles away. Not helping people move to areas with better economic opportunities would pay for $10.6 billion in tax cuts.