Senator Dianne Feinstein (D-Calif.) today released the following statement after Senate Republicans passed a tax cut bill Tuesday that will raise taxes on more than half of American families:
“Republicans just gave corporations and the richest Americans an early Christmas present at the expense of middle-class families.
“Just days before a potential government shutdown, Republicans have rushed through a tax cut bill written in secret that adds more than $1 trillion to the deficit in order to give the top 1 percent a big tax cut. That’s unconscionable.
“Republicans will now turn around and claim we don’t have enough money for domestic programs like Medicare and Social Security. The middle class can’t afford to lose these vital programs.
“Even more appalling, Republicans made the huge tax cut for corporations permanent while the few savings given to the middle class disappear over time. Talk about misplaced priorities.
“Californians will be hit especially hard by the cap on the state and local tax deduction, making it more difficult for communities to pay for services that our families rely on.
“It’s no wonder a bill that primarily benefits the wealthy is so unpopular with the American people. They understand this isn’t middle-class tax reform, it’s a middle-class tax hike.”
Favors the Rich Over the Middle Class
The Republican tax bill shifts the tax burden onto the middle class, raising taxes on more than half of American families by 2027. Meanwhile, it lowers the top rate from 39.6 percent to 37 percent for the richest individuals. By 2027, more than 80 percent of the plan’s benefits will go to the top 1 percent.
Windfall for Corporations
The Republican tax bill permanently slashes the corporate tax rate from 35 percent to 21 percent, while the lower rates for individuals will expire in 2026. It also repeals the corporate Alternative Minimum Tax, allowing companies to drive their effective tax rate down further.
Limits the State and Local Tax Deduction
The bill significantly weakens the deduction for state and local taxes, or SALT, paid by individuals. This provision in our tax code has prevented the double taxation of income since 1913. The bill caps the deduction for state and local taxes at $10,000.
In 2015, more than 6 million California households claimed the SALT deduction with an average deduction of $18,400. In 33 California counties, the average SALT deduction in 2015 was more than $10,000.
Limits the Mortgage Interest Deduction
The Republican tax bill caps the mortgage interest deduction at $750,000 for new mortgages. In California, seven counties have average home prices that are more than $750,000: Alameda, Marin, Orange, San Francisco, San Mateo, Santa Clara and Santa Cruz counties.
Increases the Deficit
According to the latest Joint Committee on Taxation analysis, the Republican plan will increase the deficit by nearly $1.5 trillion. Estimates of previous versions of this bill have shown it would not generate nearly enough growth to pay for the lost revenue.
Threatens Medicare, Medicaid and Social Security
The increased deficit could automatically trigger across-the-board cuts to important social safety net programs, including $25 billion in Medicare cuts. The increased deficit could also be used as an excuse by Republicans to enact future cuts to Medicare, Medicaid, Social Security and other domestic programs to pay for the lost revenue.
Hurts California Wildfire Victims
The Republican tax bill limits the deduction for losses suffered during a disaster to only federally declared disasters. Since most wildfires do not receive a federal declaration, this bill could make it harder for victims of future wildfires to recover.
Attacks the Affordable Care Act
The bill repeals the individual mandate, which would increase health care premiums by more than 10 percent in the individual market and leave 13 million more Americans without health insurance.
Threatens the Alaskan Wilderness
The Republican tax bill opens up an untouched region of the Arctic National Wildlife Refuge for oil and natural gas drilling. The Arctic region has already been destabilized by climate change and this provision only increases our dependence on greenhouse gases. It also creates the potential for a catastrophic oil spill that would devastate a pristine area of the Alaskan wilderness.