Budgets and legislation are a reflection of our values, and the latest tax bill introduced to Congress last week shows that Republicans value big businesses and the top 1% of Americans more than the everyday families they represent. With this tax bill, they advertise tax breaks for middle-class Americans and support for local business, but don’t be fooled — they’re throwing peanuts at you.
The Trump team hopes to save money for Americans by slashing the corporate tax rate from 35% to 20%. They say that lowering the tax rate would “[prevent] American jobs, headquarters, and research from moving overseas,” so that more Americans could be hired and middle-class families would reap the benefits of a tax cut.
But nearly all credible economists agree that — as explained by Dr. Paul Krugman, winner of Nobel Economics Prize — corporate tax cuts “confer huge benefits on the wealthy, do little if anything for the middle class, and greatly increase the [national] deficit.” The Trump team is pushing for “trickle-down economics” but refuses to say that phrase because the Trump team knows that middle-class Americans won’t actually be gaining anything from this tax plan.
Instead, this tax plan only hurts middle-class Americans. Republicans are sneaking in cuts on tax deductions and credits, for reasons that I can only assume are symbolic. The tax deductions and credits that are being removed impact each of us on a very personal level.
For example, if you’re a student with a federal loan, right now, the IRS offers you a tax deduction of up to $2,500 each year if you make less annual income than a certain threshold. This deduction assists young and middle-aged people who are making a small salary and who still have a large amount of student debt to pay off. But the tax bill, if it passes, removes this tax deduction for students as early as 2018. If you are a student, you will be losing a protection that alleviates your long-term debt. Money that would be going toward your student loans will now have to go toward federal taxes. We shouldn’t be punishing students for pursuing higher education.
If you’ve been affected by natural disaster or robbery — i.e. your house burned down or someone stole your TV — the IRS allows you to deduct your losses on your tax form, alleviating the cost of replacing a home or valued items. But the new tax bill ends this protection. If this tax bill passes, unless FEMA or other organizations provide you with one-time relief, you should expect to bear the cost of everything you lose. For families who are struggling to make ends meet as it is — if they ever have to face a loss they never expected — a loss of protection would be devastating. I refuse to believe that families should be punished for the crimes of others or for the unpredictable nature of weather and disasters.
If you’ve ever considered adopting, you’d know that the process of adoption is one of the largest financial expenditures you can make for your family. While, of course, the joy of raising a child transcends the cost, you can’t ignore the $40,000 figure looming over you. In our current tax code, if you adopt a child and make less than $243,540 per year, the IRS provides you a one-time $13,750 adoption credit to offset some of the adoption fees.
Keep in mind that the adoption credit is not a deduction. It mainly helps families who are middle and lower-class. The IRS provides these tax credits for behaviors they deem beneficial to society, such as giving money to charity or installing solar panels on top of your home. Tax credits encourage positive behavior. Since 1996, they have determined that adoption is beneficial to society and worthy of a tax credit.
But the Republican tax deal strikes the adoption credit, dumping all costs of adoption on the family. Obviously, adoptive parents aren’t deserving of a special subsidy — but I’d hate for a family to decide that they can’t adopt because the cost of it becomes too high for them to handle. I’m pained for the child who will lose a home just because a potential family will no longer be able to afford them.
And yet, tax credits for adoption and tax deductions for student loans and natural disasters are only three examples of a larger tax bill that affects each one of us. This bill strips us of tax protections for personal moving costs, medical expenses, alimony payments — among many other things, even a tax deduction for electric cars would be in jeopardy. This is only the beginning of a long line of tax cuts that exist to help us.
Of course, if you don’t believe that adoptive families deserve tax credits or that students should be able to pay off their student loans before taxes, then you may see nothing wrong with this tax proposal. If so, you and I would disagree on a fundamental level. Because if a small tax credit is all it takes to incentivize something like adoption, then I’d gladly pay more in taxes to give a new home to a child. But by removing the adoption credit, we’re stripping a resource from the people who need it the most: lower and middle-class Americans.
Analyzing the rest of this tax plan will take experts weeks, but what we already know is egregious. Anyone who cares about fairness and the security provided by our government should consider calling their representatives. We should stop this blatant transfer of wealth from the Americans who need the protections our current tax plan provides.