The Central Coast can't afford the GOP tax plan

The Central Coast can't afford the GOP tax plan
By: Rep. Salud Carbajal | 12/6/2017

On Monday, the House and Senate met to negotiate the final version of their tax plan behind closed doors, but there are a few things about the plan we know to expect.

Every iteration of the Republican tax plan has proven to balloon the deficit by at least a trillion dollars and hand the majority of benefits to multinational corporations at the expense of Central Coast homeowners, seniors, students, and middle-class families.

Tax reform is hard, and lasting reform requires difficult tradeoffs to achieve fiscal responsibility. I would absolutely support negotiations across party lines, aimed at making our tax code fairer for taxpayers and more competitive for businesses. So far, unfortunately, those of us in the minority haven’t been invited to participate meaningfully in these conversations.

As a result, the tax plan avoided these hard choices and instead, according to the non-partisan Congressional Budget Office, will raise deficits by at least $1.2 trillion over the next decade.

We need comprehensive tax reform, but not a plan that ignores the fiscal repercussions and expects our children to reconcile this debt down the road.

Last week, the Senate passed its bill that eliminates the State and Local Tax (SALT) deduction, a tax break that allows individuals to deduct their state and local taxes paid from income when filing a federal tax return. This proposal is particularly damaging to Californians. In 2015, the deduction saved San Luis Obispo and Santa Barbara County residents nearly $2 million.

The plan will also hurt homeowners by placing new limits on mortgage interest deductions, forcing Central Coast homeowners to pay an extra $15,000 a year on average and making it increasingly difficult to buy a home in California.

Eliminating the deduction for medical expenses not compensated for by insurance would devastate seniors and those battling costly illnesses. Currently, once medical bills exceed 10 percent of a person’s income, they can be deducted from federal taxes. By eliminating this provision, we are placing a new tax on our seniors and disabled Americans, essentially guaranteeing that catastrophic illnesses will lead to financial ruin.

It also targets students by cutting the student loan deduction, preventing many low- and middle-income young people that rely on student loans, from gaining the skills they need to enter a 21st century workforce. With our nation’s graduates and their families holding more than $1.3 trillion of debt from pursuing higher education opportunities, it is unconscionable that the majority in Congress voted on a plan to exacerbate this crisis.

The Senate managed to make its plan worse, creating more uncertainty in our health insurance market and preventing more Americans from affording insurance. By repealing the individual health care mandate, leaving an additional 13 million Americans without coverage, this bill will no doubt result in even higher, more unaffordable insurance premiums.

While there may be short-term benefits that were included to make the legislation more palatable, like increasing the child tax credit from $1,000 to $1,600 per child, even these are only temporary and will revert to previous levels by 2027.

This tax hike is a bad deal for Central Coast families. I will continue to vehemently oppose legislation that favors large corporations while eliminating many of the tax deductions and credits that middle-class families and small businesses rely on.

I vowed to work across the aisle when I was elected to represent the Central Coast, and that remains a guiding principle of my public service. I continue to believe that bipartisanship is necessary to creating lasting solutions for families on the Central Coast. Over half of the legislation I have introduced my first year in office has Republican support.

I am proud to work with my friends in the majority party as a part of working groups like the Problem Solvers’ Caucus and the Climate Solutions Caucus, both committed to finding bipartisan solutions on the many challenges we face regarding health care, immigration, and climate change.

Congress can achieve tax relief for the middle class and small businesses if we work together. We need to roll up our sleeves, set aside egos, and get to work on bipartisan reform that simplifies the tax code and puts middle-class families first. 

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