Death and Taxes: Dangerous Tax Reform Bill Introduced – Take Action Now!

Last week House Republicans unveiled their tax reform bill, the Tax Cuts and Jobs Act (PDF). Their bill makes major changes to the U.S. Tax Code, giving huge tax cuts to the wealthy while ultimately harming the rest of the country. Not only will the tax bill directly harm disabled and poor people, but it will also increase the national deficit by at least $1.5 trillion, setting the stage for major cuts to Medicaid and other essential programs that will bring even more harm to our community.

Take Action Now!

Congress is trying to use the same fast-track process they tried to use on healthcare, and we must stop this bill before it gets to the Senate! If this tax plan becomes law, wealthy people and corporations will become richer, while people with disabilities, poor people, and other marginalized communities foot the bill. We must stop this! Call your Representatives by calling the Capitol Switchboard at (202) 224-3121 or (202) 224-3091 (TTY) today! See below for more details about the bill.

Background: While the tax bill is full of permanent tax cuts that will benefit wealthy people and corporations, everyone else will see little or no benefit. In fact, the New York Times recently reported that the bill would raise taxes for nearly 13 million people earning less than $100,000 a year. There is no doubt that disabled and low-income individuals will be harmed by this bill. 

Part of this harm will be caused by the elimination of important tax deductions and credits. The bill will eliminate the student loan interest deduction, which allows individuals to deduct up to $2,500 in interest paid toward their student loans; the adoption tax credit, which helps families afford adoption; the tax-exempt status of private activity bonds (PABs), which finance a significant amount of affordable housing construction and rehabilitation; and the federal deduction for state and local income and sales taxes, which has the potential to result in local service cuts (things like schools, healthcare, roads, etc.). It also eliminates:

• The medical expense deduction: This tax deduction allows people to deduct medical expenses that exceed 10% of their income. The number of people who use this deduction is small, but they are all people with high healthcare costs, which largely includes people with disabilities, chronic health conditions, and other medical conditions. People are allowed to deduct expenses for a variety of expenses including treatments, surgeries, medications, and medical travel.
• The credit for expenditures to provide access to disabled individuals: This tax credit incentivizes small businesses to make their businesses accessible for disabled people. Small businesses can claim a 50% credit per year for expenditures between $250 and $10,250 that increase access and compliance with the ADA.
• The Work Opportunity Tax Credit: This tax credit provides incentive for employers to hire individuals from specific target groups who face increased barriers to employment. Target groups include disabled people who receive services from Vocational Rehabilitation, SSI recipients, returning citizens, veterans, and long-term unemployment compensation recipients.

Again, beyond these changes, the worst thing about this bill is that it increases the deficit by at least $1.5 trillion, and as we’ve said before, tax cuts don’t pay for themselves. Therefore, even though the tax bill itself does not cut Medicaid or other programs and services, it sets the stage for MAJOR cuts to Medicaid and other vital programs to pay for tax cuts for the wealthy. We fully expect the GOP to cover the cost of their massive tax cuts by targeting Medicaid, which they’re already proven they are intent on cutting. We also expect to see cuts to Medicare, Social Security, and other programs we rely on – like the Independent Living Program – through appropriations. Take action today!

Links:

• Bill text (PDF)
• Ways and Means Committee Section-by-Section Summary (PDF)

Definitions:

• Tax Cuts: lower the amount of taxes you are required to pay
• Tax Deductions: lower your taxable income; amount depends on your tax bracket
• Tax Credits: lower your tax bill dollar for dollar; amount is the same regardless of your tax bracket