The wealthiest 1 percent of Louisianans will get the greatest share of the tax cut plan proposed by the U.S. House of Representatives. And the share of the tax cuts going to the top 1 percent would grow through 2027, according to a 50-state analysis of the House tax plan released yesterday by the Institute on Taxation and Economic Policy (ITEP). Meanwhile, the value of the tax cut would decline over time for every income group in the state except the very richest.
The House Republican tax bill would cut taxes by roughly $150 billion per year in the United States. That’s equal to the combined cost of:
- Doubling the Pell Grant program, which provides aid to low- and moderate-income college students; AND
- Doubling cancer research at the National Institutes of Health; AND
- Funding the full backlog of needed maintenance at National Parks; AND
- Providing child care assistance to 6 million children; AND
- Providing opioid addiction treatment to 300,000 people; AND
- Training 3.5 million workers for in-demand jobs
Read the entire report and get more Louisiana-specific details here.
Tax increase for middle class families
Analysis produced by the New York Times shows that many middle-income Americans would pay more under the House tax plan. The hardest hit are those with high out-of-pocket medical expenses and families with three or more children. Among the deductions which are eliminated by the House tax plan are the personal deduction, deductions of state and local income and property taxes, cost of health insurance for self-employed workers, out-of-pocket medical expenses, student loan interest and more. Ben Casselman and Jim Tankersley of the New York Times have the story:
Senator Mitch McConnell of Kentucky, the majority leader, went further, telling the MSNBC host Hugh Hewitt over the weekend that “nobody in the middle class is going to get a tax increase” under the bill. Few independent economists find evidence to support that claim. Analyses published since the plan was introduced last week have consistently found that some middle-class families would see their taxes go up immediately, compared with existing law.
Attacks on the ACA continue
In the coming weeks, the House of Representatives will weigh dozens of amendments to the proposed tax plan. One amendment on the White House’s wish list is a repeal of the Affordable Care Act’s individual mandate, the requirement that every individual enroll in a health care plan or pay a penalty. The nonpartisan Congressional Budget Office predicts hikes in the number of Americans without insurance beginning next year, and insurance companies have explained that this year’s increases to premiums are partially caused by their concerns that the mandate won’t be fully enforced moving forward. Aviva Aron-Dine of Center on Budget and Policy Priorities sums it up:
In total, CBO estimates that the number of Americans without health insurance would increase by about 15 million if the individual mandate were repealed, increasing the non-elderly uninsured rate from about 10 percent to about 15 percent. (This estimate is broadly consistent with prior analyses from RAND and the Urban Institute.) CBO’s estimates also suggest that large increases in uninsured rates would occur beginning in 2018 or 2019.
CHIP continues to languish
While Congress has plenty of time to debate tax “reform,” there are other items on its to-do list, such as passing a budget, that must get done by the end of the year. At the top of that list is the Children’s Health Insurance Program (CHIP), a program that is broadly popular on both sides of the political aisle yet continues to languish after its funding expired Sept. 30. The Advocate’s Stephanie Grace weighs in:
So a program that everyone purports to love has become yet another pawn in the Washington’s never-ending partisan wars. And as politicians in Washington jockey for relative advantage, state health officials and governments, not to mention these kids’ parents, are left to worry about what the future holds. It would be nice to believe that Congress will act before the money runs out, because not to do so would be a clear abdication of its responsibility.
Number of the Day
48 percent – The top one percent of earners’ share of the proposed House tax cut in 2027 (Source: Center on Budget and Policy Priorities)