Republican tax scheme passes U.S. Senate
On December 1, Republicans in the U.S. Senate rushed through a massive rewrite of the federal tax code that is nothing more than a naked giveaway to corporations and big business. While the rich will get ever richer, middle class families will be left holding the bag.
Taxes will actually go up on many working people, while others get only a small decrease that will be phased on in the years ahead. Meanwhile, the bill vastly increases the federal deficit—opening the door for Republicans to push for massive cuts to Social Security, Medicare and Medicaid.
“Senators who voted for this tax plan just proved to their constituents once and for all that they are not on the side of working families,” said AFSCME President Lee Saunders. “This is not tax reform. It is a jackpot for corporations and the wealthiest Americans, and a disaster for seniors, children and the working people who drive our economy.”
The House and Senate will now attempt to craft a final version of the bill. Call your Member of Congress TODAY and tell him/her you oppose this disastrous measure. Tell them to VOTE NO on any tax bill that helps the wealthy, not working families. You can call toll-free to be connected with your representative: 1-866-957-9069.
After you make the call, pass on this information and ask your co-workers, friends and family to call too. Here are some of the negative consequences of this harmful tax scheme:
- The deficits created by the tax cut will trigger automatic cuts to Medicare. Under current budget law, known as PAYGO, deficits from this legislation must be offset by cuts to Medicare and other programs. In 2018, hospitals, doctors and other providers will see a $25 billion cut in payments. The cut to Medicare over ten years will total more than $400 billion.
- The tax bills will kill jobs. In both the Senate and House tax bills, a business that creates jobs in the US will be subject to a 20% tax on its profits. But a business that outsources those jobs to another country will pay ZERO U.S. taxes on profits. (Currently, companies pay taxes on U.S. profits earned overseas and brought back to the U.S. But, their taxes are reduced to account for taxes paid to a foreign government.)
- The bills would eliminate the federal deduction for state and local income taxes (SALT) paid by families who itemize their taxes. This will increase the taxes of almost every working person in Illinois.
- The bill imposes a new tax on state and local public pension funds. This tax—of 39%!—will further jeopardize the stability of Illinois already troubled pension systems.
- 13 million people will lose their health coverage and millions more will see their premiums go up by 10%. The bill eliminates the Affordable Care Act’s requirement that most people obtain health coverage. In order to keep coverage affordable for all and to prohibit insurance companies from excluding those with pre-existing conditions, everyone must obtain coverage. This is the same principle that makes Medicare work - everybody participates.
- Millions of working families will pay higher taxes over the next decade. In both the House and Senate bills, tax cuts that benefit low and middle income people are TEMPORARY. As a result, millions of families will pay higher taxes over the long term. In the Senate bill, the average taxpayer with an income between $10,000 and $30,000 will pay higher taxes by 2021. By 2027, 67 million families with incomes below $100,000 will pay higher taxes and 87 million families with incomes below $200,000 will pay higher taxes.
- The overwhelming consensus among mainstream economists, including the Congressional Joint Committee on Taxation, is that the tax bills will not increase economic growth as claimed by Congressional leaders. Moreover, corporations have experienced record increases in profits since 2007, but this has not translated into investment. Instead, the extra profits have been used to raise executive salaries, buy back stocks to increase their price, and increase dividend for shareholders. All of these steps largely benefit the top 1%.
