The Republicans in Congress have released a tax plan that is purely a sleight of hand, claiming support for working families, parents, and individuals across the country while they undermine policies that enable families to grow and prosper.
Their plan, in an effort to achieve “simplification,” disguises a small package of new credits, a modest increase in the child tax credit, and a higher standard deduction as more than sufficient for families to reap benefits compared to the existing tax code. The math doesn’t add up for too many families. The notion that Americans are made whole by the lowering of overall rates and doubling the standard deduction ring immediately hollow.
Take these examples:
Expanding the child tax credit from $1,000 to $1,600 is commendable, but because the $600 increase won’t be refundable, the lowest-income families who may not end up owing federal income tax are unlikely to ever realize the benefits of an expanded tax credit. Even as the bill seeks to expand the households eligible to claim the child tax credit, doing so in this way unnecessarily targets American families living in economic insecurity.
The elimination of the adoption credit is cruel to families who want to bring a child into their home and crueler to children desperately waiting for a family.
Repealing the exclusion for dependent care assistance programs directly hurts working parents who pay federal income taxes, increasing their tax liability and their exposure to the incredibly high costs of childcare by removing a key offsetting benefit.
Reducing the mortgage deduction to homes below $500,000 disproportionately impacts middle class families living in high cost of living areas. Capping state and local tax deductions (SALT) encourages states to use regressive taxes and fees that disproportionately affect working families. Families work tirelessly to access affordable, safe, and stable housing to raise their children, and it’s important to preserve that ability for all families, wherever they live.
Eliminating the employer-provided child care business tax credit increases the cost of this critical employee benefit for working parents and jeopardizes the future of these employer sponsored programs.
Eliminating personal exemptions means that, for large families, any tax benefit they might have received from the rest of the tax package would be largely or entirely negated.
Many young parents are still paying their student loans back. These families rely on the deductibility of student loan interest to squeeze out just a little bit of extra income to support themselves and their children.
Finally, the proposal touts a brand new “family” credit for each parent and any nonchild dependents, but the credit is short term and is not refundable, again placing it out of reach for low income families and making it temporary to boot.
These are not pro-family polices.
Doubling the standard deduction does not fully replace the losses in tax credits and deductions under current law for many American families. This plan dis-incentivizes home ownership, undermines savings plans for elementary or secondary education, capitalizes on student loan debt, and makes adoption and childcare more expensive. Even with the increase in a standard deduction and the modest new family credit touted by Congressional advocates, the proposal abandons families to a simpler, but far less generous tax code.
Economic strength and growth is paramount to the American family, but it must be done responsibly and with an eye towards helping parents provide for their children. Though Raising Our Future PAC supports increases in child tax credits, the tax proposal unveiled today eliminates important deductions and credits that help parents and removes tax provisions for business that allow them to help their employees.
The Tax Cuts and Jobs Act fails American families. We urge Congress to consider the impact their proposals will have on parents across the country and to reconsider policies that make it harder for parents to make ends meet.