The House Republicans put out an article shattering 7 False Claims surrounding the tax plan.
BOLD AND ITALICS
Claim #1: Those tax cuts that aren’t paid for will trigger automatic cuts in Medicare and other programs for people with disabilities.
This is fearmongering. This is, of course, referring to the potential of a sequester, which in theory could block deficit-increasing tax cuts. However, this type of “PAYGO” sequester, signed into law in 2010, has never happened. Since its enactment, Congress has exempted 29 bills from this requirement and, between 2015 and 2016, PAYGO was waived seven times.
I hadn’t heard this talking point yet but it is important they laid out the truth on it. The left loves fear mongering on issues like this and well it is important people don’t think their Tax Cut is coming with a price tag.
Claim #2: Tax cuts are skewed towards the wealthy, and according to the nonpartisan Joint Committee on Taxation, families earning $10,000 to $75,000 will see their taxes increase in ten years.
What JCT is calling a “tax increase” is just plain wrong. Their flawed research begins with their misanalysis of the individual mandate. Here’s what they got wrong. If an individual makes between $10,000 and $30,000, they’re eligible for a subsidy to buy health insurance under Obamacare. These subsidies are actually refundable tax credits (who knew?). Without an insurance mandate in place, and if that individual declines to purchase health care, two things happen. (1) They receive a tax cut because the mandate penalty no longer applies. And (2) they don’t receive the tax credits to buy health insurance. This does not equal a tax hike. It’s actually just the foregoing of a tax credit for health insurance they clearly did not want in the first place.
Now. JCT did get one thing right. Aside from its flawed analysis of the individual mandate, they did report that taxpayers in every income bracket could see their taxes reduced – with the largest relief coming to those making between $20,000 and $50,000.
I will talk about this under the next claim.
Claim #3: If the individual mandate is repealed, health insurers will discriminate against Americans with disabilities and other pre-existing conditions.
The thing is, the repeal of the individual mandate has absolutely no effect on the pre-existing condition guarantee or lifetime limits and caps. These two are completely different – and separate- things. This isn’t a logical cause and effect. Fun fact: the pre-existing condition guarantee and lifetime limits and caps were actually Republican ideas and priorities in the 2010 health care debate. They remain in place today and are here to stay.
The individual mandate is a very touchy subject. It is a touchy subject due to the fact people don’t understand it. To explain it to you it is basically a birth tax. It forces you to buy Health Insurance or pay a tax. Now, what the left doesn’t tell you is that this tax hits the middle/lower class. Here are what we have written on this mandate so far:
Claim #4: Repeal of the medical expense deduction will hurt middle- and low-income earners who depend on them to offset high “out of pocket” medical expenses.
First off, the final tax bill retains and expands the medical expense deduction. That should be answer enough, but we’d still like to take a minute to address the false claims on how losing this deduction would hurt the average worker.
Here’s the context that tax reform opponents refused to recognize: deductions, like the medical expense deduction, are only available to people who choose to itemize. Namely the wealthiest people in this country, most of whom make more than $200,000 in annual income. So, where do individuals with disabilities fall on this spectrum? Well, only 34 percent of Americans with disabilities pay taxes. The median income for this demographic is $21,572. Under our current tax code, 94 percent of those making below $25,000 take the standard deduction. Meaning, this demographic is not itemizing and that they will actually benefit from the doubled standard deduction.
This is good. Now, of course, they point out the blatant lie in this. The media/left claim they are getting rid of the medical expense deduction when the truth is that they are actually expanding it. They could’ve ended there but they decided to think about the future of Conservatism. They furthered destroyed the leftist lie. Once again they try and use something because it has to with health as a form of fearmongering. They clearly layout here that upper-middle-class people use this deduction and not low-income earner in our country.
Claim #5: The Tax Cuts & Jobs Act reduces incentive for charitable deductions by raising the standard deduction.
Large donations make up the vast majority of charitable giving. Our tax bill does not fundamentally change the structure of the charitable deduction, and actually allows individuals to claim a deduction for gifts totaling up to 60 percent of their adjusted gross income meaning those who do give substantial amounts to charity will still have that same incentive.
If you donate to charity solely based on the fact you are getting a deduction then you aren’t going to be an overly generous person, to begin with. We also just pointed out above that the standard deduction actually goes to help the people who need it most. So they doubled the standard deduction and also found a way to still incentivize charity work for the people donating the most.
Claim #6: Eliminating SALT would disproportionately affect people living in higher-tax states such CT, NJ, NY, & CA. People in higher tax states will end up with large tax increases; and/or states may lose public support for investing in quality public services (such as education, housing, & transportation) that benefit their constituents, including people with disabilities.
Again, context is key. The SALT deduction is only available to those taxpayers who itemize, the high earners. Americans with disabilities generally do not fall into this itemizing demographic as (1) only about 34 percent of people with disabilities pay taxes, and (2) the median income for this group is just over $21,000 which means they are taking the standard deduction (which we’ve doubled). Additionally, the final plan allows for the SALT deduction up to $10,000.
This was actually fear mongering I fell for. I initially thought the high tax states were going to be railed by this Tax Plan, that is not true. They are certainly hit harder but to the level, the Democrats were claiming it is nowhere near.
Under the new plan, taxpayers who itemize will be able to deduct their state individual income, sales and property taxes up to a limit of $10,000 in total starting in 2018.
Currently, the deduction is unlimited. But filers have to choose to deduct either individual income taxes or sales taxes. For most people, deducting income taxes is more beneficial (unless of course you live in a no income tax state). In addition, property taxes were also entirely deductible.
So, this is what SALT is. Now, here is who pays it.
Almost 90% of the SALT benefit goes to taxpayers with income higher than $100,000, according to the Tax Foundation.
Less than a third of taxpayers itemize deductions to begin with. Of those who do, nearly all of them take the SALT deduction.
High-income and high-tax states benefit the most from the deduction. Together, California and New York receive around one-third of the total value of the deduction, the Tax Foundation found. Filers in California, New York, New Jersey, Illinois, Texas, and Pennsylvania claim more than half of the value of the deduction.
The SALT deduction is usually the main reason for itemizing. More than 95% of itemizers claimed the deduction in 2014, while 28% of all taxpayers claimed it, reports the Tax Foundation.
“The SALT deduction is not only valuable to taxpayers, it also often pushes them out of standard deduction and they benefit from other deductions as well,” said Lilian Faulhaber, associate professor of law at Georgetown University Law Center.
But fewer taxpayers are expected to itemized going forward since the new reform nearly doubles the standard deduction.
There is that trusty standard deduction again. Notice that they went away from itemizing and simplified the code. No longer will people need to itemize because they will fall into the standard deduction.
Claim #7: Tax Cuts & Jobs Act hurts people with disabilities by repealing the Disabled Access Credit (DATC), and the Work Opportunity Tax Credit (WOTC),
This is simply false. The Disabled Access Credit (DATC) and the Work Opportunity Tax Credit were both maintained in the final version of the Tax Cuts & Jobs Act.
This is information that needs to be shared with everyone. The bottom line is that this Tax Bill helps Americans. It isn’t perfect but that doesn’t mean it shouldn’t have been passed. Our old Tax System was outdated and hurt not only individual taxpayers but small business and big mega-corporations a like. America is better for this Tax Plan don’t let the media tell you any different.