The Republican Tax Plan Attacks Key Middle Class Tax Deductions to Give Huge Benefits to the Wealthy and Corporations

Washington Post: GOP Tax Plan Would Shrink Mortgage Interest Benefit, Slash Corporate Tax Rate

Bloomberg: How The GOP's Tax Plan Could Wallop Homeowners

CNN Money: House Tax Plan Would Kill The Student Loan Interest Deduction.

CNBC: The GOP Tax Bill Would Wipe Out Key Deduction For Nursing Home Residents

 

THE REPUBLICAN TAX PLAN IS A GIVEAWAY TO THE WEALTHY AND CORPORATIONS – BUT MANY MIDDLE CLASS FAMILIES MAY PAY MORE 
Associated Press: GOP Tax Plan May Offer Little Aid For Many In Middle Class. “House Republicans have stressed that the tax plan they unveiled Thursday is tailored to benefit America’s middle class. Just how much it would remains uncertain based on the details that have been provided so far. What is clear is that many of the benefits for the middle class could dwindle over time, even while companies and wealthy individuals could enjoy lasting tax advantages. … The tax plan’s primary beneficiaries would be wealthier Americans, who would enjoy lower tax rates despite the elimination of some breaks, a repeal of the so-called alternative minimum tax and the termination of the estate tax. ’With the details they’ve presented to us so far, it looks like the tax cut benefits the wealthy and major corporations,’ said Martin Sullivan, chief economist at Tax Analysts and a former staff economist at the Treasury Department. ‘In fact, if you have a large family, given the facts that we have now, that you would pay more in taxes.’” [AP, 11/2/17] 

Washington Post: GOP Tax Plan Would Shrink Mortgage Interest Benefit, Slash Corporate Tax Rate. “House Republicans on Thursday proposed the biggest overhaul of the U.S. tax code in three decades, a plan that would sharply cut tax rates for corporations and individuals while eliminating many popular deductions that Americans have long enjoyed.” [Washington Post, 11/2/17]

NY Times (Analysis): ‘Major, Major’ Tax Cut May Not Be in Store for Middle Class. “The House Republican tax bill is a clear windfall for corporate America and a roll of the dice for the middle-class families that President Trump promised would be the centerpiece of his economic agenda. Early projections suggest the bill would cut taxes for an average middle-class family. But the typical cut could be relatively modest, compared with the benefits for businesses and high earners. More important, the myriad changes in the code would actually raise taxes on nearly 13 million tax filers who earn $100,000 a year or less, according to preliminary calculations using the open-source economic modeling software TaxBrain. Those changes also include limits on, or the elimination of, what might be called tax breaks for middle-class aspirers. The bill would no longer allow Americans to deduct interest on student loans they took out to attend college. It would limit mortgage interest deductions to $500,000 on newly purchased homes, a provision that would hit middle-class teachers or office workers looking to buy starter houses in high-priced, economically vibrant areas such as New York City and Silicon Valley. One of the bill’s biggest lifts to working families would vanish after five years — though Republicans would certainly push to extend it — and another would be diluted by the bill’s changes to how the tax code calculates inflation.” [NY Times, 11/2/17] 

Washington Post (Analysis): GOP Vision For Taxes: Many People Paying More So Corporations Can Pay Less. “The controversy is over who will gain the most: the rich and corporations. The GOP bill would cut the corporate rate well below previous attempts, eliminate a tax on inheritance that affects only people with many millions of dollars, and take other actions that do not provide direct benefits to most Americans.” [Washington Post, 11/2/17]

Vox: Paul Ryan's Poster Family For Middle-Class Tax Cuts Would Ultimately Get A Tax Hike. “Running the math on these claims reveals exactly what the top priority is in the House Republican tax bill — corporate tax cuts, not tax cuts for middle-class families. So, as the bill is written, even the poster family Paul Ryan handpicked to support the bill would lose out by year 10. Keep that in mind when you hear him and his allies claim the bill is an unequivocal tax cut for the middle class.” [Vox, 11/3/17]

CNBC: Don't Celebrate Those Cuts Just Yet. This Tax Overhaul Could Leave You High And Dry. “The winners and losers of the Republican tax proposal are beginning to emerge. Lawmakers released the Tax Cuts and Jobs Act on Thursday. The proposed legislation aims to simplify the tax code by slashing itemized deductions and cutting down the number of income tax brackets. Republicans are also seeking to reduce the federal corporate tax rate to 20 percent from its current maximum level of 35 percent. ‘There will be winners and losers in tax reform, and as it stands now, I worry that the benefits that are claimed to go to middle-income households won't play out,’ said Bill Hoagland, senior vice president at the Bipartisan Policy Center.” [CNBC, 11/2/17]

THE REPUBLICAN PLAN CUTS THE MORTGAGE INTEREST DEDUCTION
USA Today: Tax Plan Caps Property Deduction At $10,000, Puts New Limit On Mortgage Deduction. “A sweeping overhaul of the tax code unveiled by House Republicans on Thursday would cap the deduction for property taxes at $10,000 and preserve the mortgage interest deduction only for existing mortgages and new purchases with loans of $500,000 or less.” [USA Today,11/2/17]

NY Times: Tax Change on Mortgages Could Shake Up the Housing Market. “The Republican tax plan unveiled on Thursday takes aim at the most sacred of cows: the provision that subsidizes homeownership by allowing the deduction of interest on mortgage debt. … ‘The impact on the market is going to be recognizable,’ said Ure R. Kretowicz, chief executive of Cornerstone Communities, a homebuilder in San Diego. ‘There’s going to be less incentive to build, and less incentive to buy.’” [NY Times, 11/2/17]

Bloomberg: How The GOP's Tax Plan Could Wallop Homeowners. “Pricey U.S. housing markets, from the New York suburbs to California’s coastal cities, could take a direct hit under the tax-reform bill released by House Republicans. … Mark Zandi, chief economist at Moody’s Analytics, said the tax changes could initially cut prices by 10 percent in expensive markets and 3 percent to 5 percent across the U.S. ‘You can see why the industry is not too excited by all this,’ Zandi said. ‘It’s not good for home sales, house prices or new housing construction.’” [Bloomberg, 11/2/17]

Reuters: Republican Tax Plan Would Hurt U.S. Housing Market –Brokers. “A congressional Republican plan to slash a pair of popular tax deductions for home purchases and property taxes has set off alarm bells among realtors on the U.S. coasts, who fear it will throw cold water on the country’s hottest housing markets. … ‘There’s no doubt the proposed tax legislation will negatively impact real estate on both coasts,’ said Judi Desiderio, chief executive officer at Town & Country Real Estate, a brokerage in tony East Hampton, New York.” [Reuters, 11/2/17]

CBS News: GOP Tax Plan Cuts Mortgage Deduction In Half -- Starting Today. “Do you count on your mortgage deduction at tax time? If your loan or loans are more than $500,000, you won't be able to deduct the interest from your federal income taxes under the proposed Republican House bill unveiled today, which cuts the current deduction cap from $1 million.” [CBS, 11/2/17]

Asbury Park Press (NJ): GOP Tax Plan: NJ Middle-Class Homeowners Could Pay More. “Middle-class homeowners in New Jersey could be left with a higher federal tax bill under the House Republican tax plan unveiled Thursday, according to an analysis of the long-anticipated measure.” [Asbury Park Press, 11/3/17]

Sacramento Bee (CA)/McClatchy: Mortgage Deduction Cap Would Hit Some California Home Buyers. “The tax overhaul House Republicans unveiled Thursday keeps the mortgage interest deduction, as promised. But it adds a cap for new home buyers, who would only be able to deduct the interest for the first $500,000 of their mortgage. That would hit hard in California, where the average home price now hovers around half a million dollars, more than any other state. … ‘From what we have seen so far, limiting the mortgage interest deduction to $500,000 will no doubt hurt homeownership in states with high housing costs such as California,’ California Association of Realtors President Geoff McIntosh said in a statement.” [McClatchy, 11/2/17]

LA Times (CA): Owning A Home Could Cost More Under GOP Tax Plan, Especially If You Live In L.A. “The Republican tax plan released Thursday seeks to dramatically rewrite rules that have shaped the housing market for decades, potentially dealing a blow to California, where a shortage of housing has led to some of the highest home prices in the nation. … ‘It’s a blow for California,’ said Nela Richardson, chief economist at online real estate brokerage Redfin.” [LA Times, 11/2/17]

LA Times: GOP House Tax Bill Would Deliver Blow To California Homeowners. “House Republicans released a sweeping tax overhaul Thursday that would limit or end many of the most popular tools used to minimize how much Americans owe— particularly in high-cost areas like California -- including lowering the cap on mortgage interest deductions and eliminating write-offs of state income taxes.” [LA Times, 11/2/17]

Southern California Public Radio: GOP Tax Plan Has Outsized Impact On Socal Homeowners, Homebuyers. “Congressional Republicans introduced a tax overhaul plan that would disproportionately affect future homebuyers in high-priced real estate markets such as Southern California.” [89.3 KPCC, 11/2/17]

CBS Sacramento (CA): Trump Tax Plan Could Be Bad News For California Housing Market. “It could also take a toll on the housing market in California. It’s been a cherished tax deduction for homeowners nationwide. According to taxfoundation.org, in the Sacramento area, taxpayers deduct about $2,500 for their mortgages, but those deductions could be on the chopping block. … Gustavo Gonzales with Santa Clara Co. Association of Realtors said, ‘Look at the numbers! I mean, we are being punished because our housing is expensive. That’s not fair to any Californian.’” [CBS Sacramento, 11/2/17]

Bay Area News Group (CA): Bay Area Home Buyers Face Mortgage Deduction Slam From GOP Tax Plan. “Prospective Bay Area home buyers face a forbidding tax hit on new mortgages under a proposal by Republican lawmakers to slash federal taxes. GOP lawmakers want to place a cap of $500,000 on mortgage interest deductions for new home loans. Under current tax law, up to $1 million in mortgage interest can be deducted. Slashing the cap in half would hit the Bay Area, where the median home price for all nine counties was $768,000 in September and $1.075 million in Santa Clara County.” [Santa Cruz Sentinel, 11/2/17]

THE REPUBLICAN PLAN ELIMINATES THE STUDENT LOAN INTEREST DEDUCTION AND KEY EDUCATION TAX CREDITS
Chronicle of Higher Education: Republican Tax Proposal Gets Failing Grade From Higher-Ed Groups. Republicans in Congress released their proposed overhaul of the nation’s tax laws on Thursday, including several measures that would place new tax burdens on colleges and students — and, critics said, could undermine charitable giving to higher education. The bill was met with immediate opposition from a number of higher-education groups, which argued that the measure would rob institutions of vital dollars and increase the price of college for debt-laden students and already-strapped families. ‘The House tax-reform proposal released today would discourage participation in postsecondary education, make college more expensive for those who do enroll, and undermine the financial stability of public and private two-year and four-year colleges and universities,’ said Ted Mitchell, president of the American Council on Education and under secretary of education in the Obama administration, in a written statement.” [Chronicle of Higher Education, 11/2/17]

Bustle: Got Student Loans? Trump’s Tax Plan Might Actually Horrify You. “While eliminating those deductions is bound to impact taxpayers across the board, the GOP tax proposal could stand to impact millennials in a major way. How? Two words: student loans. Under current tax law — and with certain restrictions — interest paid on eligible student loans can be deducted from your total taxable interest. However, in looking to axe "special interest deductions," the GOP's new tax proposal could eliminate the current student loan interest deduction. … ‘Students graduate with enormous debts, that's well known,’ Stanford University tax law professor Joseph Bankman tells Bustle. ‘If you can't deduct your student loans, we're really increasing the cost of education.’ … ‘This is a provision that just increases the taxes on human capital and moves us in the wrong direction.’” [Bustle, 11/2/17]

Washington Post: Teachers Spend Nearly $1,000 A Year On Supplies. Under The GOP Tax Bill, They Will No Longer Get A Tax Deduction. “It’s well known that teachers — even those who earn meager salaries — dig deep into their own pockets for supplies to do their jobs, with one study estimating they spend an average of nearly $1,000 a year on everything from pencils to batteries. For now, teachers can get a small tax break — deducting up to $250 from their taxes — for what they spend on supplies. But under the GOP tax reform bill, that deduction would go away for teachers and other categories of workers, including certain state and local officials and performing artists.” [Washington Post, 11/2/17]

Wall Street Journal: House GOP Plan Would Affect Tax Breaks for Higher Education. “The House Republicans’ tax plan would affect benefits for Americans who enroll in higher education, boosting a popular tax break, eliminating two others and repealing a deduction for student-loan interest.” [WSJ, 11/2/17]

CNN Money: House Tax Plan Would Kill The Student Loan Interest Deduction. “House Republicans released a tax reform plan Thursday that would eliminate a tax break for Americans with student debt. The student loan interest tax deduction saves people as much as $625 a year, though most see a smaller benefit.” [CNN Money, 11/3/17]

LA Times: Republican Tax Bill Would Kill Deductibility Of Student Loan Interest. “The tax deduction for student loan interest would be eliminated as part of the sweeping tax changes proposed by House Republicans on Thursday. The changes also call for levying a 1.4% tax on the investment income earned by private colleges and universities that have sizable endowments, which would appear to include USC. … But John Walda, chief executive of the National Assn. of College and University Business Officers, said in a statement that repealing the student loan interest deduction was one of several reasons his trade group ‘has serious concerns with a number of provisions’ in the tax bill. ‘Part-time students who take classes to acquire new job skills will no longer be able to claim an education tax credit.’” [LA Times, 11/2/17]

US News and World Report: GOP Tax Plan Would Eliminate Student Loan Deduction, Educational Assistance Programs. “For example, the plan would no longer allow borrowers to deduct interest paid on their student loans. In addition, the proposal would repeal tax-code language allowing employers to establish programs that provide reimbursement to their employees for education expenses like tuition. Through such education assistance programs, employees can exclude from their taxable income up to $5,250 per year that's used for educational expenses at the undergraduate and graduate levels. According to the Society for Human Resource Management, employers often offer educational assistance programs in efforts to improve recruitment and retention, and to help maintain a skilled workforce. ‘I was surprised,’ Kathleen Coulombe, a senior adviser for government relations at the society, says of the provision. ‘The section has enjoyed bipartisan support. It always has.’” [US News, 11/2/17]

STAT: Paying Off Med School Debt? The GOP Tax Proposal Might End The Student Loan Interest Deduction. “Newly minted doctors and other health care workers may lose a critical tax deduction under the tax code overhaul House Republican leaders unveiled Thursday. The proposal repeals the student loan interest deduction — a policy that helped more than 12 million Americans who racked up education loans save up to $2,500 on their tax bills in 2015. … ‘What that really translates to is, whenever you make payments on your student loans throughout residency, all of those payments are literally going toward interest. They’re tax-deductible,’ said Dr. Daniel Gouger, the Education and Advocacy Fellow for the American Medical Student Association. ‘When you’re thinking about how much interest you’re having to pay when your principal is over $200,000, it’s an incredible amount of money.’ … But Gouger warned that the policy change would have a ‘disproportionate impact’ on the health care workforce — and in particular, on poorer Americans more likely to be deterred from medical school if the effective cost of attendance rises.” [STAT, 11/2/17]

Inside Higher Ed: Tax Benefits at Risk for Colleges, Student Borrowers. “The sweeping tax overhaul released by House Republicans Thursday would kill or limit key benefits for many colleges, students and borrowers paying off student loans. … Students -- especially older, part-time and graduate students -- would also see negative consequences from provisions of the Republican proposal, higher ed advocates said. The bill restructures the American Opportunity Tax Credit, eliminating tax benefits for students who take more than five years to graduate, as well as part-time and graduate students. And it repeals the Lifetime Learning Credit, which is used by grad students, workers who need retraining and part-time students and nontraditional undergrads who take more than four years to graduate.” [Inside Higher Ed, 11/3/17]

ELIMINATES THE MEDICAL EXPENSES DEDUCTION
Kaiser Health News: House Tax Bill Would Kill Medical Deductions. “The tax bill unveiled by Republicans in the House on Thursday would not, as had been rumored, eliminate the tax penalty for failure to have health insurance. But it would eliminate a decades-old deduction for people with very high medical costs. … ‘For many people, this is a big deduction,’ said David Certner, legislative counsel for AARP, which opposes the change. AARP has calculated that about three-quarters of those who claim the medical expense deduction are 50 or older, and more than 70 percent have incomes $75,000 or below.” [KHN,11/3/17]

CNBC: The GOP Tax Bill Would Wipe Out Key Deduction For Nursing Home Residents. “The Republican tax bill will leave the nation's biggest health-care tax exemption for employer plans unchanged but would wipe out a key medical deduction for many elderly Americans in nursing homes. The bill would repeal the medical expense deduction, which allows people who spend more than 10 percent of their income on out-of-pocket health costs to write them off.” [CNBC, 11/2/17]

Medscape: GOP Tax Overhaul Eliminates Medical Deduction. “Taxpayers would no longer be able to deduct medical expenses after the 2017 tax year under the proposed Republican tax overhaul plan, introduced in the House yesterday.” [Medscape, 11/3/17]

GUTS STATE AND LOCAL TAX DEDUCTION
Seattle Times: Washington State Sales Tax Deduction Axed In Republican Tax Bill. “The Republican tax bill introduced in Congress Thursday would end a state sales tax deduction taken by many thousands of Washington taxpayers on their federal returns.” [Seattle Times, 11/2/17]

San Francisco Chronicle:  California’s High Taxes, Costly Housing Mean Trouble Under GOP Tax Plan.  “People who live in high-tax states with high housing prices would fare worst under the tax bill released by House Republicans Thursday. Analysts are still poring over the details and crunching the numbers, but in general, ‘the bill is a large cut for businesses and a smaller tax cut for individuals,’ said Howard Gleckman, a senior fellow with the Urban-Brookings Tax Policy Center.” [San Francisco Chronicle, 11/2/17]

Washington Post: Blue States Will Be Hit Hardest By GOP Tax Plan’s Limits On Deductions. “The GOP tax plan’s changes to deductions would hit people in blue states hard, with limits on popular tax deductions that would have the biggest effects on people with high property taxes and expensive homes.” [WaPo, 11/2/17]

Boston Herald: Gov. Charlie Baker: Tax Overhaul Hurts Massachusetts Families. “Congressional Republicans’ long-awaited sweeping tax overhaul has drawn swift criticism from Gov. Charlie Baker over plans to eliminate the state and local tax deduction — and mixed responses from business groups. The proposal includes the repeal of the state and local tax deduction, which allows taxpayers to deduct the amount they pay from their federal taxable income. ‘Governor Baker has serious concerns about the impact that eliminating the state and local tax deduction would have on Massachusetts families,’ said Brendan Moss, a spokesman for Baker, in a statement.” [Boston Herald, 11/3/17]

The Tennesseean: How The Republican Proposal Could Mean A Tax Increase For Thousands Of Tennesseans. Tennesseans would no longer be able to deduct state and local sales taxes on their federal returns under a tax-reform plan pushed by House Republicans, raising the possibility of a tax increase for thousands of people across the state. Since 2004, taxpayers have had the option of taking an itemized deduction for either state and local income taxes or sales taxes on their federal returns. Tennesseans in Congress have fought for years to keep the sales tax deduction, arguing it is a matter of fairness since residents of other states can deduct their state income taxes. Tennessee doesn’t have a state income tax. But the GOP tax bill released Thursday eliminates the deduction for state and local income taxes and sales taxes. Rep. Diane Black, a Gallatin Republican who chairs the House Budget Committee, said she has no problem with eliminating the sales tax deduction, even though she has argued in the past that it should be made permanent.” [Tennessean, 11/3/17]