Last week, Republicans in the Senate rammed through a tax bill with the potential to massively reshape the country's economy. And while the nearly 500-page plan contains plenty good news for corporations and the wealthy, it also has the potential to affect middle and lower-class families in a not-so-positive way. Here are just three of the ways the GOP's tax plan could hurt families.
It's important to note that the tax bill still has to go through a few hurdles before becoming law. The Senate plan differs from the plan that passed the House of Representatives, and Congress will have to reconcile those two bills before sending an official plan to be signed by President Donald Trump. At least one senator, Susan Collins (R-Maine) has stated that she will not guarantee her support for the final version of the tax bill until she knows what's in it, according to The Hill. Still, it seems extremely likely that Republicans desperate to produce a legislative achievement will unite, and push the plan forward into law, according to Jim Tankersley and Alan Rappeport at The New York Times.
And many parts of the plan do sound good. Prominent Republicans are touting the GOP tax plan as a huge tax cut for all and a big win for the middle class, with Trump going so far as to say, in a speech, "The beating heart of our plan is a tax cut for working families." But as The Atlantic pointed out, the idea that the GOP tax plan will primarily help middle and lower class families is a big old myth.
No Long-Term Relief
Under the GOP tax plan, most families will get an initial tax cut. However, while the corporate tax cuts in the Senate plan are permanent, the bill has the individual ones expiring after 2025. And according to The Washington Post, an analysis from the official congressional nonpartisan analysts the Joint Committee on Taxation found that, by 2027, taxes would actually go up for families making between $10,000 and $75,000 a year under the Senate bill.
Wealthier Americans, however, would likely still be benefitting from that sweet, sweet corporate tax cut, and continuing to pay less, according to the same report.
Another way that the tax plan could hurt families is through the quality of public education. According to Quartz, a report from the Government Finance Officers Association found that public school budgets will likely be affected in huge ways under the Senate's new tax plan. It's a bit complicated but basically, the new plan would no longer allow people to deduct state and local taxes from their federal income taxes (another way this plan hurts middle and lower class families), and so the GFOA projects that citizens will pressure their towns to cut taxes. A popular place to slash budgets? Local schools.
And if the certain parts of the House plan that aren't in the Senate bill stick around through conference committee, education could be affected even more. The House plan would no longer allow teachers to deduct the cost of school supplies up to $250, and would take away tuition waivers from graduate students, making the cost of a graduate education prohibitive to large swaths of current and future students. (The Senate plan would actually allow teachers to deduct up to $500 worth of school supplies, and does not include the graduate school provision.) All of that would add up to a decrease in the quality and quantity of education that less well-off kids would be able to get.
Then, there's health care. You may have thought it was safe, but the Senate version of the tax plan removes the individual mandate and, according to The Washington Post:
According to Vox, dropping the individual mandate "is the start of Obamacare collapse." If healthy (for now) people bow out of insurance that they don't want to bother paying for, premiums will rise as the remaining pool of people in the individual market needs more care. Then others who really do want insurance may be forced out because they can no longer afford the cost of their premiums. This could could hefty expenses to a family's budget.
According to CNN, the Senate bill does expand the Child Tax Credit, which aims to help families cover the cost of having children, from the current $1,000 to $2,000. That seems like an unequivocal bit of good news for familes! Oh wait, no. That extra $1,000 would not be available to the lowest-income families who need it most, if they don't end up owing federal income taxes.
All in all, the GOP tax plan does not seem to be the working class miracle that Republicans are promising. In fact, it just seems like it could very easily exacerbate our current income inequality.
There's still time to put the pressure on your representatives while the House and the Senate attempt to reconcile the two different bills. Calling is an effective way to register your thoughts on important legislation, so here's a directory to find your representative in the House, and here's the Senate directory.
And if all else fails, look to 2018, and the midterm elections.