After analysis, the USCCB has determined that the Senate version of the Tax Cuts and Jobs Act is unacceptable in its current form. The nonpartisan Joint Committee on Taxation reported that the Senate’s bill would raise average taxes on persons making between $10,000 and $30,000 per year beginning in 2021, while millionaires will get a tax cut during the same period. In 2023 and 2025, average taxes will increase for those making less than $30,000 per year, but will go down for those making more than $30,000. By 2027, after most individual tax cuts are set to expire, average taxes will increase for taxpayers making less than $75,000, while decreasing for those making more.
The Congressional Budget Office reports that this situation will be made worse for low income earners due to key health care changes. The Senate version of the bill repeals the individual insurance mandate from the Affordable Care Act without offering comprehensive health care reform. This measure fails to address problems such as protecting against millions of additional people becoming uninsured, ensuring affordability of health insurance, and protecting unborn life, conscience, and immigrant access.
The bill also eliminates the personal exemption, and, although the child tax credit is expanded, many larger families will pay more overall. The tax bill also eliminates several deductions designed to help working families with job-related expenses, such as the deductions for union dues and expenses, work clothes and uniforms, and work-related education.
At the same time, it doubles the limits for the estate tax, which only applies to multi-millionaires, and it eliminates the Alternative Minimum Tax (AMT), which was designed to prevent high-income earners from avoiding tax liability through loopholes.
The bill will result in an approximately $1.5 trillion deficit over ten years, which will be used as a reason to restrict or end programs that help those in need. The Congressional Budget Office has indicated this will trigger mandatory spending cuts as early as the end of 2018. Meanwhile, as charitable organizations are being asked to do more for the poor, the lack of an “above-the-line” charitable deduction that can be used by everyone instead of just high-income earners, will result in a more than $13 billion loss to charitable giving.
For a link to Bishop Frank J. Dewane’s November 22, 2017, letter analyzing the Senate bill, click: http://www.usccb.org/issues-and-action/human-life-and-dignity/federal-budget/upload/Senate-Tax-Cuts-and-Jobs-Act-Letter-2017-11-22.pdf