Economists say the GOP tax bill will increase overall federal taxes for 80% of Mainers. Collins and Poliquin voted for it anyway. Call and email Collins and Poliquin and submit letters to the editor to voice your disapproval and gear up for a budget fight in January.
Update 12/22: The GOP tax scam passed Congress, with the support of Rep. Poliquin and Sen. Collins, and Trump signed it into law Dec. 22. Sen. Collins said her “yes” vote was contingent on the passage by year’s end of two bills that would offset the premium hikes and insurance market instability caused by the GOP tax bill’s repeal of the ACA individual mandate. But after voting yes, Sen. Collins announced that those bills would not be taken up until next year, leaving the market and Mainers who rely on ACA coverage on uncertain ground through the holidays. We will have more details after Congress reconvenes in January. Meanwhile, call and email Collins and Poliquin and write letters to the editor to voice your disapproval.
The final Republican tax plan has been released and voting is planned for Tuesday in the House and either Tuesday or Wednesday in the Senate. While some of the problematic aspects of earlier version have been removed, the bill still overwhelmingly favors the rich and big business, damages the health care system, and blows an even larger hole in the deficit. It even adds new tax cuts and loopholes for top earners, republican legislators who worked on the bill, and Trump and his family. Many predict that the massive deficit will lead to devastating cuts to programs like Medicare and Medicaid to offset the cost. Senator Collins has said she will vote YES on the bill. If passed by Congress and signed by President Trump, the bill will ultimately increase taxes on the bottom 80 percent of Mainers, according to a new analysis by the Maine Center for Economic Policy.
THE BAD NEWS
New tax cut for the rich: The tax rate for top earners is lowered from 39.6% to 37%, and the income amount for which that rate applies is raised from $470,700 to $600,000 for couples ($500,000 for individuals). This was not in either House or Senate bill.
Middle-income Mainers lose out: In 2019, the top 1% of Mainers will receive $31,900 in tax cuts, but middle-income households making between $42,000 and $65,000 will receive only $670 on average.
New tax loopholes for Republican legislators and real estate moguls: Republican congressional leaders (including 13 who crafted this tax plan) and real estate moguls including Trump and his family will personally benefit from the last-minute addition of a real-estate-related provision that was not included in either the House or Senate bills. The provision would offer a special tax cut to LLCs with few employees and large amounts of depreciable property assets, namely buildings: rent generating apartment and office buildings.
Bigger gifts to wealthy heirs: The estate tax will not be repealed, but the rich can now pass on up to $22 million to their heirs tax-free (double the current amount).
Massive corporate tax cut: the tax rate for big business will plummet from 35% to 21%. This permanent tax cut accounts for $1 trillion of the tax plan’s cost over 10 years. The plan also eliminates the corporate alternative minimum tax.
Increases the deficit: Depending on growth rates, the bill will add between $1.4 and $2 trillion to the debt over 10 years.
Millions lose health insurance, rates rise: The ACA individual mandate is repealed, taking effect in 2019. The CBO estimates the change will lead to 13 million fewer with insurance in a decade. Premiums are expected to rise by 10% as a result.
Arctic National Wildlife Refuge exploited: The plan allows for drilling and energy exploration.
Smaller SALT deduction: State and local tax deductions are reduced and capped at just $10,000. This applies to property, income, or sales tax. It could cause property values to fall in high-tax cities which would particularly harm public schools.
Smaller mortgage interest deduction: The homeowner’s deduction is reduced from $1 million to $750,000.
THE BAD NEWS DISGUISED AS GOOD NEWS
Individual tax cuts are temporary: Most Americans will pay less until 2026. Tax rates are lowered for each income level and the standard deduction is nearly doubled. But all individual tax cuts expire in 2025.
Pass-through tax cuts are temporary: Pass-through companies can deduct 20% of their income tax-free, but only until 2025.
Tax incentives for private schools hurt public schools: Previously reserved for college savings, now plans can be used to save up to $10,000 tax-free for private K-12 schools or home school. Seen as a gift to wealthy parents, it will harm public schools in districts that receive education funding based on how many pupils enroll.
THE GOOD NEWS
Education deductions stay: The student loan interest deduction, tax breaks for grad students, and teachers’ school supply deduction remain.
Medical expense deduction stays: The medical expense deduction remains and is expanded for two years.
Child tax credit expanded: The credit was expanded to cover more working-class families, increasing from $1,000 to $2,000. More of the credit will be refundable, so families that don’t earn enough to owe income tax will now get up to $1,400.
Churches and candidates stay separate: The Johnson Amendment, which prohibits tax-exempt religious institutions and non-profits from endorsing political candidates, remains.
Keep the pressure on Collins by calling and writing to let her know how her expected yes vote will affect you. Letters to the Editor are VERY much needed right now! Have something to say but need help getting started? Contact our Letter to the Editor Project at email@example.com and we’ll help you out!