What Trump's Tax Plan Means for Millennials
I’m sure you’ve heard about the new tax bill that moved to the Senate floor today. If you’re like me, your eyes probably cross when you’re trying to understand the details of the bill, called “Unified Framework for Fixing Our Broken Tax Code.” But even though taxes are complicated and seem boring, this bill, if passed, will have major impacts on American citizens.
What does this tax bill do?
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Reduces the current marginal income tax brackets to four from seven
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Cuts the tax rate on corporations from 35 percent to 20 percent, which would reduce the amount of taxes paid by corporations by $2 trillion over the next 10 years
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Cuts the top-bracket tax rate to the levels that existed under President George W. Bush, while raising the lowest-bracket rate
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Eliminates the tax on wealthy estates (those valued at more than $5.5 million, or $11 million for couples)
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Eliminates the individual alternative minimum tax, which exists to prevent high-income filers from claiming so many deductions and preferences that they pay little or no tax
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Creates a special new loophole for high-income owners of so-called pass-through business entities, cutting the rate they pay from 39.6 percent to 25 percent (Upwards of 86 percent of small businesses won’t benefit at all)
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Eliminates personal and dependent exemptions
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Eliminates the ability to deduct large medical expenses and “casualty” losses, such as property damage from hurricanes that is not covered by insurance
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Eliminates the ability to deduct one’s state and local taxes paid
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Designates fetuses as eligible beneficiaries of “section 529” college savings accounts
What does all this even mean for you?
Because of the enormous corporate and high-income tax cuts, this bill would increase deficits by $1.4 trillion over the next decade. That money has to come from somewhere and, in this bill, it comes from programs, deductions, and services that many of us rely on. All in all, this bill is terrible for anyone who isn’t in the top 1 percent. Here are just a few examples of the programs and benefits that would be gutted.
Education
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The House bill eliminates the student loan interest deduction, though the Senate bill, as currently written, would leave this in place.
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The bill slashes funding for Federal Pell Grants, which are an important financial aid for low-income students.
Healthcare
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The bill eliminates the Affordable Care Act’s individual mandate, which would drive up premiums by 10 percent in 2019, and cause 13 million Americans to lose their health insurance.
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The House version of the bill would cut $25 billion from Medicare in fiscal year 2018 and hundreds of billions of dollars of cuts to the program overall.
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The House bill would eliminate the deduction for high out-of-pocket medical expenses.
Women
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The bill eliminates funding for the Crime Victims Fund, which supports state programs that help crime victims, including efforts to combat violence against women, human trafficking, and child abuse and neglect.
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The bill designates fetuses as eligible beneficiaries of 529 college savings accounts. This is a sneaky way to grant personhood to unborn fetuses, with the goal of stripping away women’s right to choose.
Food, Housing, and more
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The bill eliminates funding for the Commodity Assistance Program, which provides food donations to help the elderly and low-income populations, among others.
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Funding for the Affordable Housing Program is cut completely. This program supports federal home loan bank contributions to subsidize affordable housing and homeownership.
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The bill eliminates funding for the Promoting Safe and Stable Families Program, which, among other things, helps states keep children safe from maltreatment.
This isn’t even a complete list of the negative impacts this tax bill would have on American citizens.
So, what can you do?
1. Call your Senators!
The Senate is planning to vote as soon as possible, so it’s time to call. This is especially important if you have a Republican Senator. Republican leadership is confident that they can vote this bill through without any support from Democrats. They have a majority, after all. However, some Republicans actually do care about their constituents, and won’t blindly vote along party line. And maybe if enough constituents complain, other Republicans will change their vote! (One can hope…)
2. Spread the word
There is a lot of misinformation out there. But the truth is: trickle-down economics does not boost economic growth. Tax cuts for the mega rich and for corporations only helps those people and businesses. They don’t spread their tax savings among the less fortunate of us. In fact, tax breaks for the very rich actually make the wealth gap bigger and bigger. When you hear this fallacy, correct it. Share the resources below. And tell your friends and family to call their Senators!
More Resources:
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What the Tax Bill Would Look Like for 25,000 Middle-Class Families
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Congressional GOP Tax and Budget Plans Benefit Wealthiest at the Expense of Vulnerable Young People
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Ivanka Trump Should Stop Pretending the Tax Bill Will Help Women and Families
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The Senate Tax Bill Would Eliminate Programs for Farmers, Crime Victims, the Elderly, and Children
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