Tax Plan Leaves Out Utah Families

November 03, 2017

In the mad rush to achieve a legislative win with tax reform, Congress is overlooking some critical issues. In Utahns Against Hunger’s opinion, chief among them is the impact that tax reform will have on programs serving low-wage Utahns, middle income families, and children.

Not only will the proposed tax cuts not reach these populations in a meaningful way, the tax cuts promised for the wealthiest will require deep cuts to programs that supplement low-wages, inadequate retirement benefits, and disability benefits.

The House Tax Bill “would create giant new benefits for the wealthy by cutting business taxes, eliminating the estate tax, and ending the alternative minimum tax…cut in half the popular mortgage interest deduction used by millions of American homeowners, changing the deduction’s rules for new mortgages...would allow people to deduct their local property taxes from their taxable income, though this benefit would be capped at $10,000…nearly double the amount of money not subject to federal income tax, a tax break known as the “standard deduction”...but this benefit would be partially offset by the personal exemption many Americans can claim, which can be large for families with multiple children…create a new “Family Credit” and expand the child tax credit used by working families. The child tax credit would grow from $1,000 per child to $1,600 for each child” (Washington Post). Many of these provisions look promising on their face, and some would help Utahns. But the devil’s in the details.

For one, the bill does not give any way to pay for these new tax breaks, which will increase the deficit by TRILLIONS of dollars. For our representatives that believe in fiscal responsibility, this must be completely unacceptable. This deficit increase will also surely result in cuts to social programs, including SNAP, WIC, and Child Nutrition Programs, as well as housing assistance, disability services for children, child care, Head Start, Pell Grants that help low-income students pay for college, tax credits for low and middle income families, and health care. This is not an exhaustive list. The bill also increases the bottom tax bracket from 10% to 12%, so low income Americans will pay MORE taxes for fewer programs. In addition, all of these programs support working parents.

One much touted provision of the bill is the increased Child Tax Credit (CTC). But the plan’s CTC proposal is non-refundable, which means that working families with too little income do not qualify. This would exclude at least 16 million children in low-income working families.

“For example, a single parent with two children would receive no benefit from the plan’s CTC proposal unless her income exceeded $18,000; if she worked full-time, year-round at the minimum wage, she would be left out. Married couples with two children and earnings up to $24,000 would similarly be left out. In addition, for many middle-income families, other provisions in the GOP tax plan would effectively cancel out the benefits they would receive from the CTC increase” (Center on Budget and Policy Priorities).

These families left behind are working in jobs like childcare, grocery store clerks, and healthcare; jobs that are adding to the economy and provide services that improve and enhance our quality of life.

In addition, this plan ends the federal deduction for state and local income and sales taxes and limits the deduction for state and local property taxes to taxes under $10,000, which will impact state budgets and local governments. It would also likely shift more of the responsibility for paying state and local taxes from high-income people to low- and middle-income families.

In exchange for an exploding deficit, cuts to social programs, and low income families paying more taxes and being left out of the CTC, middle income families will receive moderate tax breaks at best. The vast majority of the tax cuts will go to the most wealthy and profitable corporations. This bill is unacceptable, it leaves far too many working families with fewer resources and does not reflect our values, nor the values of Utah’s representatives in Congress.

1. Contact your Congressperson in the House of Representatives and ask them to reject this plan, and any other plan that increases the deficit and leaves behind low-income and moderate income families.
2. Contact Utah’s Senators and ask them to not support the House Tax Plan and work for a bi-partisan Senate Plan that doesn't increase the deficit and doesn't leave out low and moderate income families.
3. Ask them, “What are you going to do, specifically, to protect and strengthen the programs that low-income working families need to make ends meet?”

Rob Bishop (1st district): 202-225-0453
Chris Stewart (2nd district): 202-225-9730
Mia Love (4th district): 202-225-3011
Senator Orrin Hatch: 202-224-5251
Senator Mike Lee: 202-224-5444

Suggested Script: I'm ---- -----, a constituent calling to request that Senator/Rep ____ support Utah families and protect Utahns by rejecting the House Tax Plan. House leaders’ new tax plan will add trillions to the deficit at the expense of working families, funded by slashing support for Medicaid, nutrition programs, education, and more. Meanwhile, the plan’s boost to the Child Tax Credit (CTC) leaves out 10 million children in low-income families and takes the CTC away from millions of children in immigrant families. It’s wrong to give special tax breaks to the wealthy and powerful at the expense of low-income families. Please tell Rep./Sen._____________ to reject this reckless plan. Thank you.