Washington—Senator Dianne Feinstein (D-Calif.) today released the following statement after Republicans released the final text of their tax bill that would raise taxes on millions of American families:
“I’m surprised anyone can call this a tax reform bill with a straight face. This is nothing more than a huge tax cut for big corporations and the rich, paid for by the middle class.
“It’s the height of hypocrisy for Republicans to vote for a tax cut that would add at least $1 trillion to the deficit after spending eight years railing against the national debt. Republicans who say we can’t afford programs to help middle-class families seem to have no qualms about spending $1 trillion on corporations and the wealthiest people in this country.
“Written completely in secret, Republicans are rushing to vote on a bill that never received a public hearing with outside groups and without any Democratic input or support.
“This bill is one of the most irresponsible I’ve seen. In addition to driving up the deficit, it will increase health care premiums in the individual market by 10 percent each year, leave 13 million more Americans without health insurance and threaten to destroy a pristine section of the Alaskan wilderness. This is an awful bill.”
Raises Taxes on the Middle Class
The bill shifts the tax burden onto the middle class. Meanwhile, it lowers the top rate from 39.6 percent to 37 percent for the richest individuals.
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.
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 the caps the deduction for state and local taxes, including income, sales and property 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.
Mortgage Interest Deduction
The 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 would not generate enough growth to pay for the lost revenue. It would add more than $1.4 trillion to the deficit over the next 10 years, while economic growth would only generate approximately $400 billion in new revenue.
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.
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 would leave 13 million more Americans without health insurance.