It won't be easy to get the deductions back once lost. They can thank the Republicans' tax plans.
The GOP-led Congress is in the home stretch of overhauling the USA tax code for the first time in 31 years in a bid to ease the burden on businesses and working families and ignite the economy.
"Overall, the tax cut would be smaller in 2027, because of the expiration of certain provisions in 2023 (including the new $300 family credit and 100% bonus depreciation), the effect of indexing tax parameters to a slower-growing measure of inflation, and the substitution of a child credit that is not indexed for inflation for personal exemptions that are indexed", the report said. It's not clear why, but one reason might have been to give themselves a little rhetorical space if they choose to fight any further extensions.
In a joint letter to Congress, several leaders of civil rights organizations, including NAACP President Derrick Johnson and the Rev. Al Sharpton of the National Action Network, expressed how the tax bill would affect communities of color. Then, when the deficit skyrockets, they will demand cuts to Medicare, Medicaid other safety net programs, and even Social Security. "I mean, that would be an act of betrayal", he said.
Kevin Hassett, chairman of Trump's Council of Economic Advisers, argues that the tax cuts could, in fact, reduce income inequality. Theoretically, slashing the corporate tax rate from 35 to 20 percent, as the GOP proposes, could lead to increased investment by US firms, as well as make the United States a more attractive place to do business for foreign corporations.
Equally as bad is how the plan hurts the middle class, it will also add $1.4 trillion to the national debt within the next 10 years. But the gap between the rich and everyone else could widen because the biggest tax cuts would still go to the wealthy. In the Senate, a budget bill must pass by 60 votes. Under current law, taxpayers with incomes of $200,000 or more are on track to pay 49.6 percent of federal taxes in 2019, according to JCT data.
"Historians will mark this day as one of the darkest black-letter days in the long history of this Senate", Schumer said on the Senate floor. It also says that changes made will increase the cost of college as well as student debt. The Senate bill would double those thresholds through the end of 2025.
The reality that large majorities of Americans at all income levels would pay less in taxes under the GOP plan has not discouraged Senate Democrats from making loud claims that the middle class is under assault.
The estate tax, affecting 2 in 1,000 people, may be eliminated; it's in the House version. Among the likely beneficiaries: Trump's own children. Even though Conference Committee members are not supposed to add items that are not already contained in either version of the bills being reconciled, there are ways around the rule and, on occasion, new items do find their way into a Conference Committee bill. That won't matter if one of the groups with the votes to make it happen decides it wants a shutdown, but accidentally closing the doors of the government seems even more unlikely than usual later this month. Republican Sen. Orrin Hatch has already said that the USA can not afford to fund CHIP, the children's health insurance program, because it spends too much - he considers the children served by this program freeloaders who expect the federal government to provide for them instead of making their own way.
This could further fuel income inequality.
"But the rates for pass-through income, as well as the scope of what income can qualify, it's still up for negotiation", he said.
Trump has bragged about the spectacular performance of the stock market since his election. Burgum also signed a letter with 20 other Republican governors Thursday pushing for "meaningful tax reform". The White House maintains that these lower rates will cause employee wages to jump. You probably haven't heard that the group most likely to pay higher taxes is millionaires-about 19 percent of them would be looking at a tax hike in 2019. Republicans need at least eight Democrats to break a filibuster in the Senate for any spending bill, and often rely on Democrats to make up for GOP defections in the House. But the liberal Center on Budget and Policy Priorities notes that the benefits are restricted based on income. And Trump, despite his efforts to portray himself as a defender of the working people, is eager to go along with this plutocratic agenda, which, of course, benefits him and his family.