Washington, DC—(ENEWSPF)—November 28, 2017
By: Shilpa Phadke
U.S. House Republicans recently jammed through a tax bill, the Tax Cuts and Jobs Act, that gives massive tax cuts to millionaires and the ultrarich instead of those who need it the most: working families. Ivanka Trump, who has been traveling around the country advocating for the bill, claimed in Pennsylvania, “This tax plan couples two things that are really core values as a country, which is work and supporting the American family.” But, her tax pitch does not tell the full story of the bill, namely that nearly 87 million working- and middle-class households would see a tax hike in 2027. And the massive deficit increases from the bill will likely be used by conservatives to justify cutting government programs that support families. Far from supporting working families, these consequences would be devastating to millions and hurt the U.S. economy. Ivanka Trump should be straight about how much people such as her and her family stand to benefit from the tax bills and how those benefits are at the expense of the very women and families she claims to be fighting for.
Here are the top reasons that the tax bills are bad for women and families:
Tax cuts for millionaires and billionaires
The House and Senate bills would generate an enormous windfall for the nation’s wealthiest families at the expense of everyone else by repealing the tax on wealthy estates. The House bill repeals the estate tax entirely—a $150 billion windfall to the very wealthiest people in the country. The Senate bill reduces the estate tax by doubling the already very high exemption from $11 million per couple to $22 million per couple. The National Women’s Law Center says this “would mean that only 1,800 estates in the entire United States would have to pay the estate tax and those estates would receive a tax cut of $4.4 million per couple—enough to help 1,100 students attend college with Pell Grants.” Rolling back the estate tax isn’t the only way that the wealthy win out. They would also receive large windfall tax cuts from the corporate and passthrough businesses—including the Trump Organization and Ivanka Trump’s various business holdings—and the repeal of the alternative minimum tax. In 2027, the average family in the top 0.1 percent by income would receive a $208,060 tax cut because the corporate tax cut in the bill is permanent.
Furthermore, as a result of statutory Pay-As-You-GO (PAYGO) requirements, the massively deficit-increasing tax cuts will automatically trigger immediate cuts to programs that serve the middle class and families, such as Medicare; social services grants for child care and foster care; and funds that support efforts to combat violence against women. These tax cuts also disproportionately help build and concentrate more wealth in the hands of a very small group of men at a time of near record high inequality. Such cuts would further cement the gender wealth divide at a time when women are playing a greater economic role in their families.
Fails to meaningfully address the cost of child care
Ivanka Trump has claimed that she wants to make child care more affordable. But so far, there is little to suggest that she really understands the problem and wants to help struggling low-income and middle-class families afford child care. Neither the House nor the Senate bills do anything to extend the existing child care tax credit to the families who don’t benefit from it under current law. Both bills expand the Child Tax Credit (CTC)—but in a way that primarily helps higher-income families. Working families who would be helped the most if the proposed increase to the credit was fully refundable won’t receive any meaningful new support. For example, compared with current law, a single mother with two children earning just $14,500 per year would see a $75 increase if the bill were enacted, while a married couple with two children earning $500,000 per year would get a $4,000 increase. In addition, the Senate bill’s CTC changes expire after 2025. After that year, only the tax cuts for corporations would be permanent, while working families would see permanent tax increases from the bill’s new inflation-indexing, which would reduce the value of personal exemptions, the standard deduction, and the Earned Income Tax Credit.
A stealth attack on the Affordable Care Act
The Affordable Care Act (ACA) has been under constant attack since Trump has taken office. Amid criticism of the ACA, Ivanka Trump has failed to stand up for women across the country that rely on access to a range of health care services, including reproductive care. Now the Senate is attacking the ACA one more time, by attempting to repeal the individual mandate in the proposed tax bill, which would mean that 13 million fewer Americans would have health insurance by 2025 and many middle-class families would see premiums go up. A typical, unsubsidized family of four would pay nearly $2,000 more for marketplace coverage in 2019.
Furthers extreme, anti-choice agenda
Demonstrating that congressional Republican leaders’ anti-choice obsession shows no bounds, both the House and Senate tax bills include gratuitous language that could lay the groundwork for future attacks on reproductive rights and women’s health. The provision would designate fetuses as eligible beneficiaries of “section 529” college savings accounts. But that won’t help anyone save for college, since soon-to-be parents can already start 529 accounts. The provision represents an extreme, desperate attempt to insert abortion rhetoric into U.S. law. As 7 out of 10 people say they believe women should have the right to safe and legal abortion, this is just another example of how Ivanka Trump is out of touch with everyday people. Ivanka Trump should stand against this provision and support reproductive choice, so that women—especially women who work—can choose when and if to become mothers.
Paid family leave
Ivanka Trump has identified paid family leave as a priority but has failed to offer up a proposal that would help increase working people’s access to paid family and medical leave. Now, the Senate tax bill includes another corporate tax giveaway that falls under the guise of helping families with paid family and medical leave. As the National Partnership for Women and Families stated, “The proposal would offer small tax credits to employers who voluntarily offer paid family and medical leave to certain employees, but it would do nothing to put paid leave within reach for the millions of working people who have not won the ‘boss lottery.’” Only 13 percent of private sector workers in the United States have access to paid family leave through their employers. The employer tax credits in the Senate bill won’t provide paid leave to those who need it the most and is unlikely to actually change business practice—especially considering as it expires after 2019.
The House version of the tax plan will eliminate the ability for families to deduct very high out-of-pocket medical expenses from their taxable income. This would affect the ability for a family struggling to make ends meet afford chemotherapy drugs, cancer surgeries for breast cancer, or afford expensive fertility treatments, such as in vitro fertilization—in addition to many other hardships. In 2014, nearly 9 million individuals claimed the medical expense deduction, including more than 6 million individuals that earn less than $75,000. This is another deduction that disproportionately harms women. Research found that women pay more of their monthly income for extraordinary medical expenses, and eliminating this deduction would harm women’s financial security.
The House version of the tax plan will also eliminate the deduction for student loan interest. In 2014, almost 11.7 million Americans took this deduction, deducting an average of approximately $1,000 from their tax bill. Eliminating the student loan deduction disproportionately harms women and people of color, who suffer from larger student loan expenses.
If Ivanka Trump advocates for a tax proposal, it ought to be a plan that will truly help all women—not just women like her. The wealthy and big business owners who stand to benefit from the Republican tax plan are more likely to be men, exacerbating the economic inequality that women face. In addition, the GOP tax plan is outright hostile to women’s equality and is a terrible step in the wrong direction. Supporting women and their families is not a hobby; it’s a serious economic issue that affects the lives of millions of families. If Ivanka Trump truly wants to support working families and women, she needs to look beyond women such as herself and embrace a tax agenda that actually does so.
Shilpa Phadke is the senior director of the Women’s Initiative at the Center for American Progress.