September 13, 2018

HIGHLIGHTS OF #TAXSCAM2

As of Sept. 13, 2018

The costs of #TaxScam2 could be $3 trillion over 10 years—that’s more than TaxScam1, which cost about $2 trillion. To deal with the ballooning deficit caused by TaxScam1:

TaxScam1 also robbed the ACA of more than $300 billion to help pay for tax cuts for price-gouging drug companies and health insurers. As a result:

  • 8 million people will lose health coverage. [Brookings Institution]
  • ACA health plan insurance premiums will spike 10%, on average, most years for the next decade, adding $2,000 to a typical family’s insurance bill. [Center for American Progress]
  • Premium increases will be even steeper for older adults, creating in effect an “age tax.” The average 64-year-old individual could face a $1,500 premium hike. [AARP]

COST & DISTRIBUTION OF #TAXSCAM2

  • Cost: $2.8 to $3 trillion over 10 years—2026 to 2035 (not counting an expected corporate tax cut on new investments). The cost is $630 billion over the first three years. [CBPP] [Tax Policy Center]
  • Tax cut for richest 1%: $40,000 on average. Bottom 40% (incomes below $55,000) would get an average tax cut of $285—less than $1 a day. [Tax Policy Center]
  • Distribution: Richest fifth would get 65% of the tax cuts; middle fifth would get 10%; poorest fifth would get 2% [ITEP]

TAX POLICY CHANGES

#TaxScam2 will likely make permanent individual provisions of TaxScam1 that expire in 2025:

  • Cuts in personal income tax rates
  • Increases in the standard deductions, and the elimination of the personal exemption
  • 20% deduction for pass-through business income, which mostly benefits the richest 1%
  • Doubling value of estates & gifts exempted from tax (from $11 to $22 million a couple)
  • Increasing the amount of income exempt from the Alternative Minimum Tax; the AMT ensures that wealthier taxpayers pay more in taxes than they would due to loopholes
  • Expansions of the child tax credit
  • Cap on the State and Local Tax (SALT) deduction and limitation to the mortgage interest deduction—these are tax increases