Unless you’re a multinational corporation or someone with a yacht, there’s a lot not to like in the GOP’s tax “reform” plan, which the party wants to ram through Congress by the end of the year — even more to despise if you’re retired, going to retire or underinsured.
To pay for this runaway train of tax goodies for global corporations and the ultra-wealthy, the GOP is raising taxes on the Middle Class and refuses to address the long-term funding shortfalls in Social Security and Medicare. Neither the House nor Senate plan addresses this issue.
That fiscal failure will likely lead to massive cuts to these popular programs. According to the Senior Citizens League analyst Mary Johnson:
““The bill does nothing at all to reduce or eliminate the tax on Social Security benefits that burdens more than half of all retiree households,” Johnson notes.
“Yet the tax cuts for corporations and the wealthiest households in the Tax Cut and Jobs Act will add an estimated $1.5 trillion to the national debt. Some conservative Members of Congress say they are planning a budget that would require mandatory spending cuts to reduce the debt next year.”
Worse yet, the House GOP plan caps mortgage interest, property tax write-offs and cuts personal exemptions while raising tax rates for middle-income earners.
Where would these cuts come from to pay for this horrendous legislation? Since they are not coming from defense or paring corporate tax breaks, the biggest target on the table are social insurance programs like Social Security, Medicare and Medicaid.
There’s more in this draconian giveaway to the wealthiest entities on the planet. Medical expense write-offs would be slashed in the House version, although they stay in the Senate bill. Loss of medical write-offs would clobber everyone with poor insurance, especially retirees.
Here’s a joint statement from the AARP and 27 other non-profits representing everyone from retirees to cancer patients:
“For the past 75 years, Americans with high health care costs have been able to deduct medical expenses from their taxes. For the approximately 8.8 million Americans who annually take this deduction, it provides important tax relief which helps offset the costs of acute and chronic medical conditions for older Americans, children, pregnant women and other adults as well as the costs associated with long term care and assisted living.
Even those with Medicare can spend a large portion of their income on out-of-pocket expenses. The average Medicare beneficiary spends about $5,680 out-of-pocket on medical care.
Furthermore, older Americans and individuals with disabilities or chronic illnesses often face high costs for long term services and support, which are generally not covered by Medicare or private insurance, as well as hospitalizations and prescription drugs, which may have significant copayments.”
House Speaker Paul Ryan and the GOP have long wanted to privatized Medicare and have repeatedly called to slash $1 trillion from Medicaid in their myriad attempts to repeal the Affordable Care Act.
What the GOP should be doing is finding a way to bring back the trillions that corporations, colleges and individuals have offshored and invest it in health and public infrastructure.
Apple alone has secreted more than $252 billion offshore. Everyone from Commerce Secretary Wilbur Ross to Ivy League Colleges have moved their money away from U.S. taxation.
The GOP could do the fiscally sensible thing by allowing more wage earnings to be taxed to support Social Security and Medicare while allowing more Americans to deduct massive expenses for college (also being cut) in-home and long-term elderly care.
Currently you’re only taxed on earnings until you reach $127,200. That’s one of the biggest tax breaks for the wealthy, who avoid their fair share to fund two of the most popular retirement programs in the country.
Welcome to middle-class tax reform. You pay more, corporations and the super-affluent pay much, much less. It’s a hurricane coming to every town, only it will somehow spare the mansions.
More Info: www.forbes.com
Categories: Money Matters