Washington—Senator Dianne Feinstein (D-Calif.) today released the following statement after Senate Republicans passed tax reform legislation that would raise taxes on half of middle-class households:
“Republicans just passed a middle-class tax hike that was written in secret just hours before the vote. That’s appalling.
“A bill that affects every single American was written in a backroom, rushed through without public hearings or expert analysis and passed without any Democratic input or support. Republicans keep trying to jam major bills through the Senate—each one of them bad.
“In addition to subtly shifting the tax burden onto middle-class families, Republicans are adding more than $1 trillion to our deficit, increasing health care premiums in the individual market by 10 percent each year, leaving 13 million more Americans without health insurance and threatening to destroy a pristine section of the Alaskan wilderness. This is truly a bad bill.”
Raises Taxes on the Middle Class
The bill shifts the tax burden onto the middle class. Households earning less than $75,000 would pay more in taxes. Meanwhile, it lowers the top rate from 39.6 percent to 38.5 percent for wealthy individuals.
Windfall for Corporations
The Republican tax bill permanently slashes the corporate tax rate from 35 percent to 20 percent, while the lower rates for individuals will expire in 2026. It also maintains deductions for corporations that were taken away from individuals, 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 paid by individuals. This provision in our tax code has prevented the double taxation of income since 1913. The bill eliminates the deduction for state and local income or sales taxes, and caps the deduction for property taxes at $10,000. In 2015, 5 million California households claimed the income tax deduction.
Increases the Deficit
According to the Joint Committee on Taxation, the bill would not generate enough growth to pay for the lost revenue. The bill 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.