What you need to know about Trump’s tax bill passing in the Senate (12/2/2017)
Late last night the Senate passed the “Tax Cuts and Jobs Act,” which will become a massive overhaul of the tax code. The bill was being thrown together only hours before the vote and it was not re-evaluated by the Joint Committee on Taxation to analyze its full impact. However, the committee’s analysis of the earlier version found it would add $1 trillion to the federal deficit over 10 years, even after factoring in economic growth.
Last Minute Changes Before Voting
There were last minute, handwritten changes on the bill that were made in private. This version did not have a public hearing, it was not released to the public, and Senators only had a couple hours to go over the bill before voting. Some complained that they couldn’t even read what the bill said because handwritten additions were added all over the pages. A preliminary version of the final Senate bill was leaked to Sahil Kapur which you can read here. Or you can read this breakdown. Remember this likely won’t even be the final breakdown so keep an eye on changes.
The only republican to vote “NO” was Bob Corker. Despite other republicans speaking out against the bill (Collins, McCain, Graham, etc) they were all eventually swayed into voting for the bill giving it the push it needed to pass 51 to 49.
Who Will Be Helped/Hurt By This Bill?
The Congressional Budget Office (CBO) estimated that the repeal of the individual mandate (which was squeezed into this bill) will lead to millions losing insurance. It’s estimated that 4 million will lose it by 2019 and another 13 million by 2027. It’s also estimated that about 1 million will lose their Medicaid by 2019 and another 5 million by 2027. Republicans claim that those figures and the fallout is exaggerated. But here’s what some evidence shows:
This has major consequences for public health. When my colleague Julia Belluz dived into the evidence on the effect of health insurance on mortality, she found two particularly compelling studies, analyzing the effects that Massachusetts’s health reform law (which was very similar in structure to Obamacare) and Medicaid expansions in three states had on death rates. Extrapolating from those studies’ findings, she found that 20 million people losing health insurance translates to anywhere between 24,000 and 44,000 extra deaths per year.
Using the smaller figure to be conservative, and extending it to the 13 million people who the CBO estimates would lose coverage under this tax bill, that means 15,600 extra deaths every year.
Wealthy people and corporations are the big winners here, who will see the majority of the benefits:
61.8 percent of the total federal tax change under the bill will go to the top 1 percent in 2027, its 10th year of implementation. They would get an average tax cut of $32,510, and the top 0.1 percent (who make at least $5.1 million a year) would get back $208,060 on average.
Overall, 50.3 percent of taxpayers see their taxes go up, with an average hike of $170; but 28 percent see their taxes go down, by $1,640 on average.
These percentages vary widely between income groups. Within the middle quintile, people earning $54,700 to $93,200 a year, 65.6 percent would see their taxes go up. But only about 1.8 percent of the very richest one-thousandth of Americans would see a tax hike.
And of course those hurt most by the bill will be:
The sick & Elderly - “Cuts to Medicare will total about $25 billion over the next fiscal year alone. In the long term, the deficit will also force cuts to Medicaid and Social Security, two other programs that elderly people rely on heavily, in addition to low-income and disabled individuals.” (source)
Universities - “The legislation takes the unprecedented step of taxing the income of certain private universities—specifically, it imposes a 1.4 percent tax on net endowment income for universities with endowments larger than $250,000 per full-time student. Some commenters have applauded the tax, as if it would rectify everything they consider amiss with higher education in America. But few of those supporters have examined the measure’s dire consequences—repercussions that would frustrate everything from access to college in America to the top-notch university research that creates U.S. jobs.” (source)
Grad Students - “’Particularly folks who are in graduate school are taking on student debt in order to go to graduate school, and so they have high payments going forward,’ Hoene said. ‘And one of the ways that is off-set is through the deductions they get in the federal taxes, and that deduction would be going away.’ Hoene also said that there are provisions in the bill that target higher education, and that could take away deductions from colleges and universities. (source)
Charities - “New tax laws could strip away one of the key motivators of year-end giving in the United States - the right to take a tax deduction for the amount you give to qualified charities if you itemize your taxes….” “…Wealthy individuals who give tens of thousands of dollars a year may not be impacted, because it will still make sense for them to itemize. But smaller donors who give hundreds or thousands could drop away. As of now, however, Schwab Charitable, which is one of the largest custodians of charitable accounts, has only seen a boom in giving.” (source)
Veterans - “’There are a set of provisions in the GOP tax bills, both on House and Senate sides, that would actually take an exemption for the bonds that are used to fund the development of facilities for veterans, housing for hospitals, and for a variety of other public structures, Hoene said.’Taking away those exemptions, which has been what makes them an attractive investment, means that they’ll be less attractive investments to people who have the money to put into those sorts of things,’ he added.” (source)
Freelance workers - “Many freelancer workers or small business owners who work from home can currently deduct certain items that they use for work (a computer, Internet, a workspace, etc), but that could also change under this bill. Some of those deductions will be going away if this passes.” (source)
People with disabilities - “The Tax Cuts and Jobs Act recommends sweeping eliminations of most itemized tax deductions and credits. Many of these deductions, taken together, serve both to ease the tax burden of people with disabilities and to improve their health and access to employment and their communities.The provision that will have the most catastrophic effect on disabled people is the removal of the deduction for out-of-pocket medical expenses. Currently, if your out-of-pocket medical expenses exceed 10 percent of your adjusted gross income, you can deduct that from your tax bill. In the Jobs and Tax Cuts Bill, that provision is excised completely.” (source)
Victims of drink driving - “This is a less well-known provision of the bill, but Senate Republicans are proposing slashing federal alcohol taxes across the board by about 16 percent, a cut affecting beer, wine, and liquor alike.There is voluminous economic evidence showing that higher alcohol taxes save lives by reducing binge drinking and thus reducing deaths due to drunk driving, liver cirrhosis, alcohol-fueled assault and domestic violence, and other causes. That suggests that lower alcohol taxes, in turn, increase deaths from those causes.”
Can We Still Do Anything?
Yes. Because of these changes the bill will have to go through the House and (likely) the Senate again. If you contact your congressmen I’d suggest doing it now and continuing to do so until the next votes & decisions come over the weeks. This bill is NOT law yet and still has many steps to go through. There’s still time to call, email, etc.
I am Silver Tongue, I am an artist. I have many characters and you can check out my art in the art tag. I occasionally practice witchcraft though I don't do anything too complicated. I am girl 2 and don't know what else to put here.
