4 Ways The Senate Tax Bill Hurts Families
UPDATE: After criticism from the nonpartisan Joint Committee on Taxation that the bill would add trillions of dollars to the national deficit, the Senate pushed voting on the bill to Friday morning. A final vote is expected later this afternoon. It is not too late to call your representatives and tell them to vote no on the bill, which will hurt the country's most vulnerable families.
Last week the Republican tax plan passed the House of Representatives, and as of last night all 52 Republican senators voted to begin debate on the bill. While corporations and many individuals will see their taxes cut, the picture’s not as rosy for families and children. Here are four ways the proposed tax plan could impact your family.
1. You'll probably get a short-term tax break. The good news is, most families will see their taxes go down in 2019 (there are a couple of exceptions; see more on that below). The bad news is, those benefits will be short-lived.
Here's the basic rundown of why: The House tax plan reduces tax brackets from seven to four: 12, 25, 35 and 39.6 percent (the New York Times published a few charts that are helpful to visualize the differences). The Senate bill keeps the seven tax brackets, but changes the rates. (If you're wondering if your tax bracket will change, check out CNN Money's detailed breakdown of the new proposed rates.) If your family earns less than $19,050, or between $260,000 and about $425,000, you’ll end up in a higher tax bracket. Because married couples’ deductions nearly double, to $24,000, you'll probably see some savings.
What happens to your tax cut? In an effort to cut down on the cost of the overall bill (basically to comply with Senate budget rules), all individual tax cuts would expire in 2025 — while the bill's corporate tax cuts would remain permanent. According to New York University professor David Kamin, this means, for example, that while a family with two kids earning $59,000 would see a $1,182 tax cut in 2018, their taxes would increase by $500 by 2027.
Who does come out on top with this bill? The wealthiest Americans, who would see their tax rate fall from 39.6 percent to 38.5 percent and would no longer be subject to the estate tax when passing property down to their kids or other relatives.
2. Medicaid could see huge cuts. Health care is where the plan gets particularly painful for families. Because the plan will add an estimated $1.5 trillion to the U.S. debt over the next decade, part of the bill known as The Statutory Pay-As-You-Go Act, or Paygo, could potentially slash the budget for Medicare and Medicaid to help erase the deficit.
Cuts to Medicaid will hurt families like Natalie Weaver's, whose 8-year-old daughter, Sophia, has Rett Syndrome and relies on Medicaid for around-the-clock live-saving care. It impacts people like 24-year-old Alicia Woods, who couldn't afford to buy health insurance when she got pregnant, and thanks to Medicaid, received the prenatal care she and her baby needed. Make no mistake, any cuts to Medicaid will have a devastating impact on the country's most vulnerable people, especially pregnant women and babies.
3. You could lose your health insurance. Because the tax plan eliminates the Affordable Care Act’s individual mandate — which requires Americans to have health insurance — experts predict that younger, healthier Americans will start leaving the individual marketplace. The result? Insurance premiums are expected to shoot up by 10 percent each year, and an estimated 4 million more people will be uninsured by 2019. That number will rise to 13 million by 2027, according to Congressional Budget Office (CBO) estimates.
Without the mandate, experts also worry that the people left on the marketplace will be forced to turn to "skinny" plans that don't comply with ACA requirements. This could mean a return to the days when insurers could kick people off plans for pre-existing conditions or refuse to pay for prenatal or maternity care — which will be especially dangerous for expecting and new parents.
4. You'll benefit from the child tax credit — maybe. The bill gets rid of the $4,050 per-person personal exemption, which will hurt larger families and single parents. The child tax credit is intended to make up for a small part of the difference; it will double, from $1,000 to $2,000 per child. In a cruel twist, the credit will more significantly benefit wealthier families, while the poorest families won’t be able to take full advantage of the full amount. Because it’s partially refundable, to 15 percent of your income once you earn $2,500, about one in three families wouldn’t be able to take advantage of the full $2,000 credit, according to some estimates. And, as mentioned above, this is one of the individual credits that would expire by 2025 — so it provides only temporary relief.
What happens next?
In order for the bill to become law, two things have to happen: 1) 50 of 52 Senators have to vote "yes," and 2) the House and the Senate have to pass the exact same bill. One version of the bill has already passed the House; if the Senate passes its version, the House can either agree to pass the Senate’s version of the bill as is, or the two chambers have to get together, hammer out their differences, and ultimately pass some combination of the two bills. In other words, there’s still a chance that the finished bill will look very different than it does now before it hits President Trump’s desk.
What does this mean for you?
"This shouldn’t be too surprising to anyone, but President Trump and Republican leaders in Congress are committed to jamming through a bill that would be particularly devastating for women," Senator Patty Murray (D-Washington) tells What to Expect exclusively. "Not only would women be impacted by the tax increases on workers and families, and not only would they have to pay the price for more tax breaks for the wealthiest Americans and biggest corporations — but their plan specifically targets women’s health in a bizarre and completely unnecessary way, and it would lead to massive cuts to Medicare, Medicaid, and other investments that help so many women, children, and families get the health care they need. Women across the country are paying attention and fighting back, and I can only hope that we can persuade a few Republicans to stand with us and stop this."
It isn't too late to call your representatives and tell them to vote no on this bill. In fact, it's more important than ever. Two Republican senators — Susan Collins of Maine and Bob Corker of Tennessee — remain on the fence. If you live in one of those two states and you're worried about how this bill will impact you, they need to hear from you right now.
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