The Top Reasons to Oppose Congressional Tax Plans

By Carrie Welton and Jessica Gehr

Republican leaders are rushing through their long-awaited tax plans with the hope of passage by the end of the year before the American public understands how destructive they would be. While details of the House and Senate bills differ, both would give big tax cuts to the richest families and corporations, while most middle- and low-income families would realize little or no benefit—with many even seeing their taxes go up. Even more damaging is that both bills would increase the deficit by $1.5 trillion—or more—over the next decade, forcing cuts to critical programs. Here are the top reasons to oppose the congressional tax plans.

If you are concerned about economic inequality…
…then you should oppose the House and Senate tax cuts because they will solidify economic inequality. For decades, regressive tax policy has allowed the wealthiest individuals to claim the benefits of increased productivity while middle-class income has stagnated. This has resulted in deepening income and wealth inequality, especially for people of color. Congressional plans to repeal the estate tax, which currently only applies to the top 0.2 percent of estates, is estimated to cost $269 billion over the next decade. To shore up a tax system that works for the wealthy, taxpayers would have to make up the difference or face cuts to critical programs. And claims that this change benefits small businesses and farms belie the truth—only about 80 such households each year would benefit from this proposal. In reality, under the House bill, each of the wealthiest families would get an estate tax cut worth an average of $4.4 million—enough to pay for Pell grants for 4,000 college students.

If you are concerned about basic needs programs…
…then you should oppose the House and Senate tax plans because they will ultimately be paid for by cuts to critical programs and services, like the Supplemental Nutrition Assistance Program (SNAP) and Medicaid. In 2014, the nonpartisan Congressional Budget Office (CBO) warned that the growing deficit will increase pressure to raise taxes and lower spending for benefits. This pressure hinders policymakers’ ability to adapt spending policies to unexpected challenges, such as economic downturns. Republican leaders have already signaled that their tax plans would lead to budget cuts next year in basic needs programs. They will blame these programs for the ballooning deficit in the hope that, by then, the American people will have forgotten who created this problem in the first place. 

If you are concerned about education…
…then you should oppose the House and Senate plans to repeal the federal deduction for state and local income and sales taxes and cap the deduction for state property taxes, which will hurt state and local governments’ ability to pay for education and other critical services. Repealing the deductions would strain state budgets by hindering states’ ability to generate revenue for education, setting the stage for cuts to state and local education funding. 

If you are concerned about children…
…you should oppose the House and Senate Child Tax Credit (CTC) plans because they leave out hardworking families. Millions of children in families earning low-wages would receive little or no benefit from the revised CTC, while the plans expand the credit to higher-income households—including those earning up to $500,000 a year in the Senate bill. Moreover, the plans exclude about a million immigrant children who currently qualify for the CTC. Studies have proven that working-family tax credits improve child achievement and long-term educational attainment, increase earnings in the next generation, and lead to positive health outcomes. Rather than expand the CTC to higher-income household, Congress should first ensure that those struggling to make ends meet aren’t left further behind.

If you are concerned about health care…
…you shouldn’t be surprised that the tax plans have become yet another method to undermine the Affordable Care Act. Senate Republican leaders have just announced that repealing the individual health insurance mandate is now part of their tax bill. CBO has estimated that repealing the individual mandate would increase the number of uninsured by 13 million over a decade while driving premiums up for those who remain covered. Additionally, the tax bill could trigger automatic cuts, including $25 billion to Medicare next year, if Congress doesn’t find another way to offset the increased deficit. This latest move would gut health care to pay for massive tax cuts for the rich. 

The Senate bill also includes what is essentially another corporate giveaway masked as an employer tax credit for paid family and medical leave that doesn’t actually increase access to this critical workplace support. Currently, 86 percent of all U.S. workers lack access to paid family leave including over 95 percent of low-wage workers. This lack of paid leave disproportionately hurts workers of color who must often risk their economic security to take time to care for a new child, a seriously ill family member, or themselves after a serious illness. This proposed tax credit essentially subsidizes businesses that already offer paid leave and primarily rewards big businesses. It would do little to promote universal paid leave, provide an adequate duration of leave time, or ensure sufficient wage replacement to help meet the financial needs of low-wage workers.

Republicans’ tax plans have been broadly criticized by economists and fly in the face of economic research showing that increasing the income of lower-paid workers generates more economic growth than the same increase for higher-paid workers. We urge the House and Senate to reject these tax proposals because they heavily benefit the wealthy and corporations. Instead, Congress should focus on changes that not only provide the revenue critical to a well-functioning government but also ensure all households have access to economic opportunity through a more equitable tax code.