Tax plan losers
THE UNINSURED:
The tax bill removes a penalty that was charged to people without health insurance as required by Obama’s 2010 health insurance law as a way to hold costs down for everyone. By eliminating this mandate, the tax bill likely will deprive 13 million people of insurance, according to estimates by the Congressional Budget Office. The repeal of the health insurance mandate will help preserve revenue to pay for the tax cuts. The government would no longer have to subsidize as many low-income people receiving insurance. This change would generate $314.1 billion over 10 years, according to the Joint Committee on Taxation.
COMMUTERS:
It could get more expensive to ride the subway or park your car near work. Employers would no longer be able to deduct from their taxes the cost of providing parking or transit passes worth up to $255 a month to workers. Bicycle commuters also would lose their benefit from companies. Technically, companies still could offer this benefit. But under the tax bill, they will lose the financial incentive to do so. Such a change could have the effect of reducing ridership on public transit and possibly increase costs for riders on rail and bus systems.
HOMEOWNERS IN HIGHTAX STATES:
The bill imposes a $10,000 cap on people who deduct their state, local and property taxes. Currently, there is no limit on how much in state and local taxes you can deduct. Some Republican lawmakers in such high-tax states such as California and New York intend to vote against the bill because their constituents’ taxes could increase as a result of the provision. Their opposition, though, isn’t expected to block the bill’s passage.
TAXPAYERS AFTER 2025:
Most Americans would receive tax cuts initially. But the lower rates and a host of other benefits would expire after 2025. This effectively sets up an $83 billion tax hike for many millions of Americans in 2027. What’s more, people’s taxes could continue to creep up because the plan will adjust the tax brackets at a less generous measure of inflation than it formerly did. The slower indexing for inflation amounts to a $400 billion tax hike between 2028 and 2037 that would help finance the lower corporate rates, Lily Batchelder, a New York University law professor and former Obama White House adviser, observed on Twitter. Congress could decide years from now to extend the lower tax rates. But doing so would increase the deficit far more than the $1.5 trillion now being estimated by Congress’ Joint Committee on Taxation.