To pass their immense tax giveaway to the rich, Republicans need to ensure their plan would add no more than $1.5 trillion to the deficit over the next decade. To do so, they’re cutting billions of dollars in tax benefits to people trying to raise children, pay for college, buy a home or invest in renewable energy.
That is why taxes would go up for about 45 percent of middle-class taxpayers by 2026 under the House bill, according to an analysis by The Times. By contrast, the people in the top 1 percent of income will get an average tax cut of $64,720 a year by 2027, according to the Institute on Taxation and Economic Policy. Even the congressional Joint Committee on Taxation concludes that the tax cuts are heavily tilted toward the rich. Yet, the Republicans may take the knife to even more middle class benefits, because the Congressional Budget Office said on Wednesday that the bill would overshoot the $1.5 trillion target by nearly $200 billion.
If the bill exceeded the $1.5 trillion deficit threshold, it would have to be considered under rules requiring 60 votes in the Senate for passage, rather than a simple 51 vote majority. But whether the provisions in the bill are procedural necessities or just incredibly mean-spirited, these are some ways they could hurt your family:
The bill eliminates the adoption tax credit, which is worth $13,570 per child to parents dealing with adoption procedures that can cost tens of thousands of dollars.
Republicans want to get rid of the medical expenses deduction, which is primarily used by families grappling with serious health problems.
Under the proposal, dependent-care benefits that families receive from employers for things like day care or elder care, including flexible spending accounts, will become taxable.
The bill would repeal the deduction for moving expenses when families take a new job that is at least 50 miles away.
One of the biggest changes in this bill is a technical one involving how income thresholds, credits and other parts of the tax code are adjusted for inflation. This will end up pushing middle-class taxpayers into higher brackets and making credits and deductions less valuable over time.
The Republicans want to end a program that lets state and local governments issue private-activity bonds to finance housing and let homeowners claim a tax credit on certain mortgages.
The bill repeals numerous education deductions and credits. It also makes taxable the value of the tuition and other benefits universities give to their graduate teaching and research assistants.
The House bill would require at least one parent to have a Social Security number to claim the refundable portion of child tax credit.
House Republicans want to require students to provide a Social Security number to claim access to the American Opportunity Tax Credit for tuition and related expenses.
The House bill would get rid of a $7,500 tax credit for electric car purchases starting with vehicles that hit the road next year.
The production tax credit for renewable energy will become less valuable under the Republican proposal.
— The New York Times, Nov. 8, 2017