Trump's Job Killing Tax Plan is Awful
Trump's plan would reward corporations that outsource and raise taxes on working families and educators
The Trump tax plan has been all over the news recently, as Trump tries to win his first major legislative fight before the 2018 midterm elections. While much has been discussed about important tax issue like the SALT tax, less has been made about how the tax plan will affect working, union men and women.
One of the major provisions of the tax plan is a corporate tax cut. As part of this tax cut, Trump is proposing adding a worldwide minimum tax. This is a tax on money that is made by an American company overseas. Currently, companies are taxed by the country that the money was made in and then by the United States when they send the money back to the states. While this current system is not great, it is much better than what Trump is proposing. In his plan, companies will be rewarded for moving their production and profits overseas. Here is an example. Under Trump’s plan, a company would pay less in taxes by moving their production to a country that has no corporate taxes and then moving their headquarters to a country like the UK, Germany, or France, even though they are doing business and making most of their profits here. This tax plan encourages companies to move profitable operations to some of the United States’ biggest economic competitors, causing both job loss and the loss of millions in tax revenue.
Since Trump is cutting taxes and wants the plan to be passed by only Republicans in the Senate, it must not add to the deficit. This means that to give the wealthy and corporations a tax cut, someone else must have their taxes increased. Trump has proposed doing this by getting rid of a number of deductions. One that he wants to get rid of is the SALT deduction, which lets you deduct state and local taxes from your federal taxes. Another is getting rid of the union dues deduction, which allows you to pay taxes on your income after union dues are taken out. This deduction saves union members thousands of dollars a year. When New York passed this deduction for state taxes, the New York State United Teachers (NYSUT) estimated that it would save New York union members $35 million. By getting rid of this deduction, Trump is increasing taxes on union members to pay for corporate and 1% tax breaks.
Another important deduction that has been eliminated in Trump’s tax plan is the ability for teachers to get up to $250 off of their taxes for school supplies that they buy. "It's a slap in the face to teachers to take it away,” said Lisa Ochs, president of American Federation of Teachers-Kansas. For teachers, it’s like ‘Are you kidding me? You’re coming after our $250?’” said Lisa Ochs, president of American Federation of Teachers (AFT)-Kansas. The union estimates that the average teacher spends $600 a year on school supplies. This number is often higher in low-income schools where teachers take money out of their own pockets to ensure that all students have the supplies that are necessary to learn. “Under the GOP House bill, corporations keep their tax deduction for the cost of supplies,” said NYSUT President Andy Pallotta.
According to the United Steelworkers (USW) Trump’s tax plan would increase taxes on families making between $20,000 and $40,000 a year while transferring those tax benefits to people making $500,000 or more. It would also eliminate tax deductions for student loan interest and tuition expenses at a time when many millennials are drowning in student loan debt. While these tax cuts might be good for Trump and his billionaire cabinet, they will not be good for working men and women. Instead, they are being asked to finance a massive tax cut for the wealthy and corporations.