Davis Statement on Ways and Means Committee Passed Tax Bill
November 9, 2017
The Trump/Ryan House tax bill violates every common principle of fairness and leadership. This bill takes hundreds of billions of dollars from hard-working, struggling families to line the pockets of corporate special interests and the most privileged, secure elite. Real families lose under this bill. By exploding the deficit, this bill triggers cuts next year to Medicare and critical safety net programs while making college more costly by increasing student loan origination fees. In contrast, corporate special interests get immediate, permanent, and monumental tax cuts.
The top 1 percent will get a gigantic an average individual permanent tax cut of $129,000 a year. For people at the very top, like Trump himself, the tax cuts are humongous especially wealthy heirs, while opening vast new opportunities for tax avoidance. The corporations the 1 percent own will also get a massive permanent tax cut equaling almost 70 percent of the total tax cuts.
These tax breaks are based on the Republican budget which cut critical expenditures for families of working and retired Americans: $470 billion from Medicare, and $1.3 trillion from Medicaid and other health care programs over the next 10 years, plus trillions more stolen from everything from nutrition assistance to education and job training programs.
Seniors lose the ability to write off high medical costs; victims of disaster and theft lose the ability to claim casualty losses; teachers lose the ability to write off the hundreds of dollars spent to help students learn; students lose the ability to write off the interest on their student loans; charities lose key benefits that encourage taxpayers to give.
According to 2014 estimated IRS data on medical costs:
• 6.3 million (69%) of those claiming the deduction reported income of $75,000 or less;
• 4.5 million (49$) of those claiming it reported income of $50,000 or less
• 55% of all households claiming the dedications (almost 5 million taxpayers) had at least one member of the household age 65 or older;
In 2015, at a time when student debt in the United States exceeded credit card debt, 534,460 Illinois students each claimed an average Student Loan Interest Deduction of $1,122. This bill ends that deduction. In that same year 157,480 teachers claimed an average deduction of $254 because they spent money out of their own pockets for school supplies which schools strapped for funds were unable to supply. Deduction for teachers: gone.
The partial elimination of SALT – combined with cutting the cap on the mortgage interest deduction in half – will result in a double whammy on homeowners, raising tax bills while diminishing home values. The plan also will result in a backdoor hit to every taxpayer around the country, as it threatens essential public services, such as education, healthcare and infrastructure, that are substantially funded through state income and sales taxes. The plan creates an unprecedented double standard by eliminating the income tax deduction for individuals and families while preserving the same deduction for corporations.
Based on estimates recently released by the Joint Committee on Taxation the individual tax provisions in the GOP bill actually raise taxes by about $385 billion over the next ten years after setting aside the repeal of the estate tax, the lowering of the top tax rate for pass-through business income, and the repeal of the Alternative Minimum Tax – none of which provide any significant tax relief for middle-income families.
Military families, often required to relocate every two to three years will loose the ability to claim exemption from capital gains from sale of a home while facing the prospect of lower home values due to loss of mortgage interest and state and local tax deductions. 100,000 veterans per year who are certified to work under the Work Opportunity Tax Credit or the “Hire More Heros” provision of our current tax law will once again face significant challenges in finding work without critical support from their government. Paralyzed Veterans of America has pointed out that the small business deduction for making facilities accessible to persons with disabilities under the Americans with Disabilities Act will undermine years of hard work to make facilities across the country more accessible.
The infamous, unfair, market-distorting Carried Interest Loophole, used by private investment funds to escape taxes which President Trump famously and repeatedly promised to abolish remains untouched and safely ensconced in the tax code.
Proponents of these tax cuts assert that corporations will invest more in the United States as a result of the tax cuts. They assert if we allow corporations to pay less in taxes they which would finance more productive investments and innovation. They claim if we would allow them to bring some of the money they have stashed in offshore tax havens at hugely discounted tax rates they would use those funds in U.S. manufacturing plants, office space, and equipment. They solemnly proclaim that these corporations which have been so successful at shielding their profits from tax would find the United States a more attractive place to invest due to lower taxes.
That’s not what history shows. Looking at the data from decades of corporate tax cuts we now have proof that past supply-side-oriented cuts did not live up to those promises. Similarly, tax increases on high-income earners did not slow the economy. We have been snowed by these assertions before. Will we fall for them again?
What we are seeing imposed right before our eyes is nothing less than the mugging of working America with the proceeds of the mugging going to the wealthiest individual Americans and corporations. The American people will never stand for this outrage and I will continue to do all in my power to block this monstrosity.