The United States Senate passed their version of the tax bill with handwritten amendments to rush the bill across the finish line around 2am on Saturday morning.
This bill includes temporary personal income tax cuts and permanent corporate tax cuts. Deficit hawks were unable to secure a ‘trigger’ that would increase rates on corporations if the bill adds to the deficit. First, let’s be clear on what this bill will not do.
- Make college more affordable – in fact it will likely make it more expensive, especially for graduate students.
- Reduce poverty – 1 in 3 households in Ohio are living in or near poverty. Most of the tax changes will not impact them. Programs like the Child Tax Credit and Eearned Income Tax Credit (EITC) are not substantially changed in this legislation to help low income families struggling to get by. We need these credits expanded and made refundable to lift people out of poverty.
- Improve public education – This bill further shifts public resources toward private and charter schools.
- Address the opioid epidemic – This bill will likely result in 13 million fewer people having insurance – which will raise rates on others and have fewer resources available to provide treatment to those in need.
What this bill does do:
- Provides a corporate tax cut that will primarily benefit the wealthiest corporations.
- Cuts income tax rates, primarily benefiting the wealthy.
- Increase taxes on the majority of Americans over the next 10 years in order to pay for the corporate tax cuts.
- Shifts taxes: We have seen this in Ohio. The repeal of the ‘state and local tax’ deduction (AKA SALT) allows people to deduct taxes they pay at the local and state level from their federal tax bill. In reality, this will make local taxes ‘more expensive’ without the federal offset. If the local tax is more expensive, it will be harder to fund our schools.
- Will begin to tax tuition waivers for college students – dramatically increasing their tax bills.
- Allows more money to be passed onto heirs of the super rich by eliminating the estate tax.
The bill is in a conference committee now where the House and Senate differences will be ironed out. Congressional leaders are hopeful to have the bill to President Trump’s desk before Christmas.