Federal budget, tax proposals threaten retirees
I am concerned about the federal budget proposal from the House of Representatives, because it slashes spending by $5.4 trillion, and increases defense spending by $72 billion ($929 billion more than President Trump’s budget request). It cuts Medicare by $487 Billion, increases the age of eligibility for Medicare and switches to a program based on vouchers. This House proposal also cuts funding for Social Security Disability Income by $1 trillion and cuts $893 billion in non defense discretionary spending.
These facts were presented in the legislative update at the NYS Association of Retired Americans Conference in early September.
Tax reform — What’s at stake?
- Tax cuts will give huge tax cuts to corporations and the wealthy.
- Tax cuts will decrease revenue reducing government’s ability to pay for basic services.
- Tax cuts will increase pressure to cut funding of seniors programs, including Medicare and Medicaid, to allow for tax cuts.
Why are the TRUMP-RYAN tax cut proposals worrisome?
- Almost half (47 percent) of cuts go to the top 1 percent of earners.
- They will decrease federal revenue by $2.4 trillion.
- They will increase the deficit by $7.1 trillion.
- The plan eliminates most itemized deductions, impacting those at the bottom.
- They create conditions leading to Medicare and Medicaid cuts.
- The plan would cap mortgage deductions, end tax exclusions for retirement savings plans and end state and local tax deductions including property taxes.
Trump leaves little doubt “how great” his tax plan is going to be when he is in front of a crowd of supporters. But what he fails to say is that some people – one study said one in five people making between $86,100 and $149,400 per year will end up paying more. Using data from earlier plans outlined by House Republicans to fill in the blanks in Trump’s plan, the non partisan Tax Policy Center estimated 13.5 percent of taxpayers who earn between $48,000 and $86,100 would see a tax increase averaging $1,000.
U.S. Multinational corporations have $2.6 trillion in profits offshore and owe $700 billion in U.S. taxes. The tax plans give them $600 billion in tax breaks. Trump’s plan reduces the tax rate from 35 percent to 10 percent for cash profits and 4 percent for other assets. House Speaker Ryan would tax profits at 8.75 percent and other assets at 3.5 percent.
They claim corporate rates are too high and cuts are needed to spur investment and foster economic growth. This is classic trickle-down economics. The effective rate (what corporations actually pay after taking advantage of various deductions and loopholes) is 14 percent and 26 percent. Many corporations paid zero taxes in 2010.
Trump’s plan rewards corporations with a 60 percent tax giveaway. Ryan’s plan rewards them with a 40 percent tax break.
When corporations and the wealthiest Americans don’t pay their fair share, the rest of us must make up the difference and suffer the consequences. Time and again, we see politicians are governing in favor of corporations and the super rich.
The proposed budget would cut:
- Nearly $2 trillion from health care, mostly Medicaid, harming children, people with disabilities, older Americans and working families;
- $72 billion from Social Security Disability Insurance and Supplemental Security Income for low-income seniors and people with disabilities;
- $667 billion from food stamps, housing assistance, job training and other critical services;
- And more from education, medical research, environmental protections and infrastructure.
All of this would be cut, just to give $4.8 trillion in tax cuts to corporations and the ultra-rich. Make no mistake about it, this budget would take from the poor, workers and retirees to give to the rich.
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