President Joe Biden will sign the Inflation Reduction Act today, a distillation of what Americans have been clamoring for, for the past 30 years. It includes the most significant investment in climate action, plus health care and tax reform while also amazingly reducing the deficit. Here’s what the Inflation Reduction Act will mean to you, by the numbers. This is from the White House:
The Inflation Reduction Act will lower costs for families, combat the climate crisis, reduce the deficit, and finally ask the largest corporations to pay their fair share. President Biden and Congressional Democrats have worked together to deliver a historic legislative achievement that defeats special interests, delivers for American families, and grows the economy from the bottom up and middle out.
Here’s how the Inflation Reduction Act impacts Americans by the numbers:
Cutting Prescription Drug Costs
Today, Americans pay two to three times what citizens of other countries pay for prescription drugs
5-7 million Medicare beneficiaries could see their prescription drug costs go down because of the provision allowing Medicare to negotiate prescription drug costs.
50 million Americans with Medicare Part D will have the peace of mind knowing their costs at the pharmacy are capped at $2,000 per year, directly benefiting about 1.4 million beneficiaries each year.
3.3 million Medicare beneficiaries with diabetes will benefit from a guarantee that their insulin costs are capped at $35 for a month’s supply.
Lowering Health Care Costs
13 million Americans will continue to save an average of $800 per year on health insurance premiums
3 million more Americans will have health insurance than without the law.
The uninsured rate is at an all-time low of 8%, which the historic law will build on.
Defeating Special Interests
$187 million: The amount the Pharmaceutical industry has spent on lobbying in 2022.
1,600: number of lobbyists the pharmaceutical companies had in 2021 – three times the number of Members of Congress
33 years: the amount of time Congressional Democrats have been trying to lower prescription drug costs by allowing Medicare to negotiate drug prices.
19 years: number of years Medicare has been blocked from negotiating prescription drug costs
Lowering Energy Costs
Families that take advantage of clean energy and electric vehicle tax credits will save more than $1,000 per year.
$14,000 in direct consumer rebates for families to buy heat pumps or other energy efficient home appliances, saving families at least $350per year.
7.5 million more families will be able install solar on their roofs with a 30% tax credit, saving families $9,000 over the life of the system or at least $300 per year.
Up to $7,500 in tax credits for new electric vehicles and $4,000 for used electric vehicles, helping families save $950per year.
Putting America on track to meet President Biden’s climate goals, which will save every family an average of $500 per year on their energy costs.
Building a Clean Energy Economy
Power homes, businesses, and communities with much more clean energy by 2030, including:
950 million solar panels
120,000 wind turbines
2,300 grid-scale battery plants
Advance cost-saving clean energy projects at rural electric cooperatives serving 42 million people.
Strengthen climate resilience and protect nearly 2 million acres of national forests.
Creating millions of good-paying jobs making clean energy in America.
Reducing Harmful Pollution
Reduce greenhouse gas emissions by about 1 gigaton in 2030, or a billion metric tons – 10 times more climate impact than any other single piece of legislation ever enacted.
Deploy clean energy and reduce particle pollution from fossil fuels to avoid up to3,900 premature deaths and up to 100,000 asthma attacks annually by 2030.
Making the Tax Code Fairer
$0: how much some of largest, profitable corporations pay in federal income tax.
55: the number of America’s largest, wealthiest corporations that got away without paying a cent in federal income taxes in 2020.
$160 billon: how much the top 1 percent of earners is estimated to evade each year in taxes.
15%: the minimum tax on corporate profits the Inflation Reduction Act imposes on the largest, most profitable corporations.
$124 billion: savings over 10 years the Inflation Reduction Act will generate from collecting taxes already owed by wealthy people and large corporations, according to the Congressional Budget Office.
And no family making less than $400,000 will see their taxes go up a penny.
Reducing the Deficit
The Inflation Act will achieve hundreds of billions in deficit reduction.
The deficit is projected to fall by more than $1.5trillion this year after falling by more than $350 billion last year.
126 leading economists – including 7 Nobel Laureates, 2 former Treasury Secretaries, 2 former Fed Vice Chairs and 2 former CEA Chairs – have said reducing the deficit will help fight inflation and support strong, stable economic growth.
The White House issued a fact sheet explaining how President Joe Biden’s American Families Plan will support children, teachers and working families and advances equity and racial justice:
On his first day in office, President Biden signed an Executive Order directing the whole of the federal government to advance equity and racial justice. Today, the President announced a historic new set of investments to deliver on his vision of a more equitable America through the American Families Plan. The American Families Plan will help restore the promise of America for communities who have been left behind and locked out of opportunity—investing in teachers and students, empowering workers and their families, and reimagining a tax code that rewards work over wealth. By extending and building upon the provisions of the American Rescue Plan, the American Families Plan would lift more than 10 million people out of poverty in 2022. This means a 29 percent reduction in Black poverty, a 31 percent reduction in Latino poverty, and a 15 percent reduction in Asian American, Native Hawaiian, and Pacific Islander poverty, relative to the projected poverty rate for 2022. Among children, it would reduce poverty by more than 47 percent.
President Biden’s American Families Plan will deliver a fairer and more equitable America by:
Closing opportunity gaps for low-income children and children of color by providing universal access to preschool, and making quality, affordable child care more accessible across the nation.
Investing in educational opportunity for underserved communities by providing two years of free community college for Americans, including DREAMers; making Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and institutions such as Hispanic-serving institutions (HSIs), Asian American and Native American Pacific Islander-serving institutions (AANAPISIs), and other Minority-serving Institutions (MSIs) more affordable; increasing the value of Pell Grants to help more low-income students attend college; and ensuring more students are supported through completion.
Empowering teachers by investing in the training and support they need and ensuring more teachers of color can reach the classroom.
Creating a right to paid family and medical leave to ensure working parents and caregivers, including workers of color and low-wage workers, can equitably access the time off they need to support their families.
Closing gaps in our social safety net to ensure that kids have the nutritious food they need to be healthy and succeed in school.
Extending the American Rescue Plan’s historic expansions of the Child Tax Credit, the Earned Income Tax Credit, and the Child and Dependent Care Tax Credit to provide income support and cut poverty among families and workers.
Together, these investments will give millions of children across the country a fair shot at the American dream.
UNIVERSAL PRE-SCHOOL FOR ALL 3- AND 4-YEAR-OLDS
Preschool is critical to ensuring that children start kindergarten with the skills and supports that set them up for success in school. In fact, research shows that kids who attend universal Pre-K are more likely to take honors classes and less likely to repeat a grade, and another study finds low-income children who attend universal programs do better in math and reading as late as eighth grade. Unfortunately, most children, and especially children of color and low-income children, do not have access to the full range of high-quality pre-school programs available to their peers. In addition, children with disabilities benefit from inclusive, accessible pre-school programs with their peers, and all children benefit when we create socio-economically diverse Pre-K classrooms where all students thrive.
President Biden’s American Families Plan will:
Close opportunity gaps by providing universal pre-school to all 3- and 4-year-olds. President Biden is calling for a national partnership with states to offer free, high-quality, accessible, and inclusive preschool to all 3-and 4-year-olds—benefitting 5 million children. This historic investment in America’s future will first prioritize high-need areas and enable communities and families to choose the setting that works best for them, whether that’s a preschool classroom in a public school, a center, or a Head Start program. The President’s plan will also ensure that all publicly-funded preschool is high-quality with low student-to-teacher ratios, a high-quality and developmentally appropriate curriculum, and supportive classroom environments that are inclusive for all students. The President’s plan will leverage investments in tuition-free community college and teacher scholarships to support those who wish to earn a bachelor’s degree or other credential that supports their work as an educator or their work to become an early childhood educator. And, educators will receive job-embedded coaching, professional development, and wages that reflect the importance of their work. All employees in participating Pre-K programs and Head Start will earn at least $15 per hour, and those with comparable qualifications will receive compensation commensurate with that of kindergarten teachers. These investments will give American children a head start and pave the way for the best-educated generation in U.S. history
FREE COMMUNITY COLLEGE AND OTHER POSTSECONDARY INVESTMENTS
For much of the 20th century, graduating from high school was a gateway to a stable job and a living wage. But over the last 40 years, we have seen the most growth in jobs requiring higher levels of job preparation, including education and training. Today, 70 percent of jobs are held by people with more than a high school degree. American workers, and especially workers of color, need support to build their skills, increase their earnings, remain competitive, and share in the benefits of the new economy. President Biden’s American Families Plan will:
Offer two years of free community college to all Americans, including DREAMers. Community colleges provide educational opportunities for students who are often underserved by four-year universities, including first-generation students, students of color, low-income students, and adult learners. President Biden’s proposal creates a federal-state, -territory, and -tribal partnership that allows first-time college students and workers wanting to reskill to enroll in a community college to earn a degree or credential for free. Students can use the benefit for up to three years and, if circumstances warrant, up to four years, recognizing that many students’ lives and other responsibilities can make full-time enrollment difficult. If all states, territories, and tribes participate, about 5.5 million students would pay $0 in tuition and fees.
Provide up to approximately $1,400 in additional assistance to low-income students by increasing the Pell Grant award. Nearly 60 percent of Black, almost half of Latino, half of American Indian or Alaska Native, and more than one-third of Native Hawaiian or Pacific Islander students depend on Pell Grants to help pay for college. But the grant has not kept up with the rising cost of postsecondary education; over the last 50 years, the maximum Pell Grant value has plummeted from nearly 80 percent of the cost of a four-year college degree to just 30 percent — leading millions of low-income students to take out debt to finance their education. The American Families Plan would increase the maximum Pell Grant award by approximately $1,400 and allow DREAMers to access the funding.
Increase college retention and completion rates. Just 40 percent and 54 percent of first-time Black and Latino students at four-year colleges and universities, respectively, go on to earn their degree, compared to 64 percent of white students. And overall, just 40 percent of community college students, who are disproportionately low-income and people of color, graduate within 6 years. The President is proposing a $62 billion formula grant program that will provide funding to states, territories, and Tribes to support retention and completion activities at colleges and universities that serve high numbers of low-income students, including wraparound services ranging from child care and mental health services to faculty and peer mentoring; emergency basic needs grants; practices that recruit and retain faculty; transfer agreements between colleges; and evidence-based remediation programs.
Provide two years of subsidized tuition and expand programs in high-demand fields at HBCUs, TCUs, and MSIs. Research has found that HBCUs, TCUs, and MSIs are vital to helping underrepresented students move to the top of the income ladder. But despite their record of success, these institutions have significantly fewer resources than other top colleges and universities, undermining their ability to grow and support more students. The President is calling for $39 billion to provide tuition subsidies to low- and middle-income students attending HBCUs, TCUs, and MSIs. The President is also calling for $5 billion to expand existing institutional aid grants to HBCUs, TCUs, and MSIs, which can be used by these institutions to strengthen their academic, administrative, and fiscal capabilities, including by creating or expanding educational programs in high-demand fields (e.g., STEM, computer sciences, nursing, and allied health), with an additional $2 billion funding directed towards building a pipeline of skilled health care workers with graduate degrees. These proposed investments, combined with the $45 billion proposed in the American Jobs Plan targeted to these institutions, will enable America’s HBCUs, TCUs, and MSIs to help advance underrepresented students and make the U.S. more competitive on the global stage.
EDUCATION AND PREPARATION FOR TEACHERS
Few people have a bigger impact on a child’s life than a great teacher. Unfortunately, the U.S. faces a large and growing teacher shortage. Before the pandemic, schools across the nation needed an estimated additional 100,000 certified teachers, resulting in key positions going unfilled, granting of emergency certifications, or teachers teaching out of their certification area. Shortages of certified teachers disproportionately impact schools with higher percentages of students of color, which have a higher proportion of teachers that are uncertified and higher shares of inexperienced teachers, exacerbating educational disparities. President Biden is calling for investments to improve the impact of new teachers entering the profession, increase retention rates, and increase the number of teachers of color, all of which will improve student outcomes.
President Biden’s American Families Plan will:
Address teacher shortages, improve teacher preparation, and strengthen pipelines for underrepresented teachers, including teachers of color. Our country faces a serious teacher shortage problem, which disproportionately impacts students of color. The percentage of teachers in their first or second year of teaching in schools with the highest percentage of students of color is 7 percentage points higher than schools with the lowest percentage of students of color (17 percent vs. 10 percent). The percentage of teachers who are uncertified is more than three times as large (4.8 percent vs. 1.3 percent). At the same time, while teachers of color can have a particularly strong impact on students of color, around one in five teachers are people of color, compared to more than half of K-12 public school students. These disparities help drive gaps in student outcomes. Strengthening the teacher pipeline and improving teacher preparation, supporting teachers so they stay in the classroom, and investing in the recruitment and preparation of underrepresented teachers will help narrow persistent educational disparities. President Biden is calling on Congress to invest in America’s teachers, including by doubling scholarships for future teachers from $4,000 to $8,000 per year, which would help underrepresented teachers, including teachers of color, access high-quality teacher preparation programs that best prepare them for the work ahead. The plan also will invest $2.8 billion in Grow Your Own programs and year-long, paid teacher residency programs, which have a greater impact on student outcomes, teacher retention, and are more likely to enroll underrepresented teacher candidates, including candidates of color; and invest $400 million in teacher preparation programs at HBCUs, TCUs, and MSIs.
Support the development of special education teachers. There has been a 17 percent decline in the number of special educators over the last decade. Additionally, while only about half of the students receiving special education services are white, approximately 82 percent of special education teachers are white. The American Families Plan will invest $900 million in personnel preparation funds under the Individuals with Disabilities Education Act (IDEA), funding pathways to additional certifications, and strengthening existing teacher preparation programs for special educators.
Help current teachers earn in-demand credentials. Many teachers are eager to answer the call to get certified in areas their schools need, like bilingual education, but are deterred due to the high cost of getting an additional certification. President Biden is calling on Congress to create a new fund to provide more than 100,000 educators with the opportunity to obtain additional certifications in high-demand areas like special education, bilingual education, and certifications that improve teacher performance. This will particularly benefit students with disabilities and English learners.
Invest in educator leadership. Millions of teachers – and the students they educate – would stand to benefit from greater mentorship and leadership opportunities. President Biden is calling on Congress to invest $2 billion to support programs that leverage teachers as leaders, such as high-quality mentorship programs for new teachers and underrepresented teachers, including teachers of color.
High-quality early care and education helps ensure that children can take full advantage of education and training opportunities later in life, especially for children from low-income families, who face learning disparities before they even can go to preschool. One study by Nobel Laureate James Heckman found that every dollar invested in a high-quality, comprehensive birth to five program for the most economically disadvantaged children resulted in $7.30 in benefits as children grew up healthier, were more likely to graduate high school and college, and earned more as adults. But we have grave disparities when it comes to child care in our country. One analysis finds that more than half of Latino and Native American families live in child care deserts. Difficulty finding high-quality, affordable child care leads some parents, especially mothers, to drop out of the labor force entirely, some to reduce their work hours, and others to turn down a promotion – leading to lifetime consequences in terms of earnings, savings, and retirement. Lack of affordable child care can be especially challenging for the families of the nearly 7 in 10 Black women who are their families’ primary or sole breadwinners.
President Biden’s American Families Plan will:
Ensure low- and middle-income families can access affordable child care for children under the age of five. Under the President’s plan, families will pay only a portion of their income based on a sliding scale. For the most hard-pressed working families, child care costs for their young children would be fully covered and families earning 1.5 times their state median income will spend no more than 7 percent of their income on child care for their young children. The plan will also provide families with a range of inclusive and accessible options to choose from for their child, from child care centers to family child care providers to Early Head Start programs.
Invest in high-quality care. The last time the U.S. prioritized major, long-term investments in child care was when President Roosevelt signed the Lanham Act to provide free, high-quality child care in an effort to support women going to work during World War II. Not only did it enable women to work, but children who participated experienced long-lasting economic benefits, proving most beneficial for the most disadvantaged children. Under the President’s plan, child care providers will receive funding to support the true cost of quality early childhood education–including a developmentally appropriate curriculum, small class sizes, and culturally and linguistically responsive environments that are accessible and inclusive of children with disabilities. These investments support positive interactions between educators and children that promote children’s social-emotional and cognitive development.
Invest in the care workforce, including the women of color who make up a substantial percentage of the field. More investment is needed to support early childhood providers and educators, more than nine in ten of whom are women and more than four and ten of whom are women of color. They are among the most underpaid workers in the country. The typical child care worker earned $12.24 per hour in 2020, and one report found nearly half rely on public income support programs. The American Families Plan includes a $15 minimum wage for early childhood educators and ensures that those with similar qualifications as kindergarten teachers receive comparable compensation and benefits.
When fully implemented, the President’s plan will provide 3 million children from low- and middle-income families with high quality care, saving the average family $14,800 a year on child care expenses.
Paid family and medical leave supports workers and families and is a critical investment in the strength and equity of our economy. Paid leave has been found to reduce racial disparities in wage loss between workers of color and white workers, improve child health and well-being, support employers by improving employee retention and reducing turnover costs, and increase women’s labor force participation. However, currently, 95 percent of the lowest wage workers, mostly women and workers of color, lack access to any paid family leave. Sixty-two percent of Black adults and 73 percent of Latino adults are either ineligible for or cannot afford to take unpaid leave, compared to 60 percent of white adults. Additionally, Black and Latina mothers are more likely than white women to report being let go by an employer or quitting their jobs after giving birth in order to have some leave.
President Biden’s American Families Plan will:
Create a national comprehensivepaid family and medical leave program. Paid family and medical leave can help reduce racial disparities in wage loss between workers of color and white workers. People with disabilities may also have less access to paid leave due to higher rates of part time and low wage employment. The program will ensure workers receive partial wage replacement to take time to bond with a new child, care for a seriously ill loved one, deal with a loved one’s military deployment, find safety from sexual assault, stalking, or domestic violence, heal from their own serious illness, or take time to deal with the death of a loved one. It will guarantee twelve weeks of paid parental, family, and personal illness/safe leave by year 10 of the program, and also ensure workers get three days of bereavement leave per year starting in year one. The program will provide workers up to $4,000 a month, with a minimum of two-thirds of average weekly wages replaced, rising to 80 percent for the lowest wage workers. The plan has an inclusive definition of family, ensuring workers can care for and be cared by a loved one who is not related by blood, which will greatly impact LGBTQ individuals and people with disabilities. We estimate this program will cost $225 billion over a decade.
The pandemic has added urgency to the moral travesty of nutrition insecurity among children, which disproportionately affects low-income families and children of color. No one should have to worry about whether they can provide nutritious food for themselves or their children. A poor diet jeopardizes a child’s ability to learn and succeed in school. Nutrition insecurity can also have long-lasting negative impact on overall health and put children at higher risk for diseases such as diabetes, heart disease, and high blood pressure.
President Biden’s American Families Plan will:
Expand summer EBT to all eligible children nationwide. The Summer EBT Demonstrations help low-income families with children eligible for free- and reduced-price meals during the school year purchase food during the summer. The American Families Plan builds on the American Rescue Plan’s support for Summer Pandemic-EBT by making the successful program permanent and available to all 29 million children receiving free- and reduced-price meals. Research shows that this program decreases food insecurity among children and led to positive changes in nutritional outcomes.
Expand school meal programs. Currently, just 70 percent of eligible schools have adopted Community Eligibility Provision (CEP), which allows high-poverty schools to provide meals free of charge to all of their students—breaking down barriers for students who may be eligible for school meals but may not apply for them due to stigma or not fully understanding the application process. The President’s plan will allow more schools in high poverty districts to offer meals free of charge to all of their students by reimbursing a higher percentage of meals at the free reimbursement rate through CEP. Additionally, the plan will target elementary schools by reimbursing an even higher percentage of meals at the free reimbursement through CEP and lowering the threshold for CEP eligibility for elementary schools. The plan will also expand direct certification to automatically enroll more students for school meals based on Medicaid and Supplemental Security Income data.
Facilitate re-entry for formerly incarcerated individuals through SNAP eligibility. Individuals convicted of a drug-related felony are currently ineligible to receive SNAP benefits unless a state has taken the option to eliminate or modify this restriction. Denying these individuals—many of whom are parents of young children—SNAP benefits jeopardizes nutrition security and poses a barrier to re-entry into the community in a population that already faces significant hurdles to obtaining employment and stability. SNAP is a critical safety net for many individuals as they search for employment to support themselves and their families. This restriction disproportionately impacts African Americans, who are convicted of drug offenses at much higher rates than white Americans.
TAX CUTS FOR AMERICAN FAMILIES AND WORKERS
While the American Rescue Plan provided meaningful relief for hundreds of millions of Americans, that is just a first step. Now is the time to build back better, to help families and workers who for too long have felt the squeeze of stagnating wages and an ever-increasing cost-of-living. Direct assistance to families in the form of tax credits paid on a regular basis lifts children and families out of poverty, makes it easier for families to make ends meet, and boosts the academic and economic performance of children over time.
President Biden’s American Families Plan will:
Extend expanded ACA premiums tax credits in the American Rescue Plan. Health care should be a right, not a privilege, and Americans facing illness should never have to worry about how they are going to pay for their treatment. No one should face a choice between buying life-saving medications or putting food on the table. President Biden has a plan to build on the Affordable Care Act and lower prescription drug costs for everyone by letting Medicare negotiate prices, reducing health insurance premiums and deductibles for those who buy coverage on their own, creating a public option and the option for people to enroll in Medicare at age 60, and closing the Medicaid coverage gap to help millions of Americans gain health insurance. The American Families Plan will build on the American Rescue Plan and continue our work to make health care more affordable. The biggest improvement in health care affordability since the Affordable Care Act, the American Rescue Plan provided two years of lower health insurance premiums for those who buy coverage on their own. With these changes, about three in four uninsured Black adults and nearly four in five uninsured Hispanic or Latino adults are now eligible for low-cost health care. The American Families Plan will make those premium reductions permanent, a $200 billion investment. As a result, nine million people will save hundreds of dollars per year on their premiums, and four million uninsured people will gain coverage. The Families Plan will also invest in maternal health and support the families of veterans receiving health care services.
Extend the Child Tax Credit (CTC) increases in the American Rescue Plan through 2025 and make the CTC permanently fully refundable. The President is calling for the Child Tax Credit expansion, first enacted in the American Rescue Plan, to be extended. This legislation expands the Child Tax Credit from $2,000 per child to $3,000 per child six-years old and above, and $3,600 per child for children under six. It also makes 17-year-olds eligible for the first time and makes the credit fully refundable on a permanent basis, so that low-income families—the families that need the credit the most—can benefit from the full tax credit. The expanded Child Tax Credit in the American Rescue Plan will benefit nearly 66 million children, and is the single largest contributor to the plan’s historic reductions in child poverty, including by 52 percent for Black children, 45 percent for Latino children, 37 percent for Asian American, Native Hawaiian, and Pacific Islander children, and 61 percent for Native American children.
Permanently increase tax credits to support families with child care needs. To help even more low- and middle-income families, President Biden is calling on Congress to make permanent the temporary Child and Dependent Care Tax Credit (CDCTC) expansion enacted in the American Rescue Plan. Families will get back as a tax credit as much as half of their spending on child care for children under age 13, so that they can receive a total of up to $4,000 for one child or $8,000 for two or more children. The CDCTC will be fully refundable, making the credit more equitable by allowing low-income working families to receive the full value of the credit towards their eligible child care expenses regardless of how much they owe in taxes. This is a dramatic expansion of support to low- and middle-income families. In 2019, a family claiming a CDCTC for the previous year got less than $600 on average towards the cost of care, and many low-income families got nothing.
Make the Earned Income Tax Credit expansion for childless workers permanent. President Biden believes our tax code should reward work and not wealth. And that means rewarding workers who work hard every day at modest wages to provide their communities with essential services. Before this year, the federal tax code taxed low-wage childless workers into poverty or deeper into poverty — the only group of workers it treated this way. The American Rescue Plan addressed this problem by roughly tripling the EITC for childless workers, benefitting 17 million low-wage workers, many of whom are essential workers including cashiers, cooks, delivery drivers, food preparation workers, and childcare providers. For example, a childless worker who works 30 hours per week at $9 per hour earns income that, after taxes, leaves them below the federal poverty line. By increasing her EITC to more than $1,100, this EITC expansion helps pull such workers out of poverty. The President is calling on Congress to make this expansion permanent. Extending these changes will give a critical boost in earnings of an estimated 2.8 billion Black, 2.8 million Latino, and 678,000 Asian American workers.
To view this fact sheet in your browser, click here.
Senator Elizabeth Warren, Democratic candidate for President, has released details of her most controversial proposal, Medicare for All, promising that it will cover every person in America with health care, including long-term care, vision and dental, without increasing taxes on middle class families. Warren focuses on an overall restructuring taxes and spending – going after the loopholes and tax cheats and reining in military spending as well as drug costs and cutting healthcare costs by removing the for-profit insurance companies (gatekeepers) as middlemen. What her plan misses, though, is the obvious: collect the Medicare tax (1.45%, plus an extra 0.9% on income over $200,000) on all income, not just wages, and, if necessary raise the surcharge for incomes over $250,000. Interestingly, while employers would no longer pick and choose the private health insurance they subsidize, employers would still subsidize their employees’ Medicare cost. Health care is considered the leading issue for voters in 2020. Here is the detailed plan, from the Warren campaign: –Karen Rubin/news-photos-features.com.
– Today, Senator Elizabeth
Warren, candidate for President, released her plan to finance Medicare for All.
The coverage is identical to the coverage in the Medicare for All legislation
in the Senate and it will cover every single person in America with excellent,
high-quality health care, including long-term care and vision and dental.
Elizabeth will pay
for this plan without raising taxes one penny on middle class families. Instead, she will put about $11
trillion in the pockets of American families by eliminating what they would pay
in premiums, deductibles, co-pays, and other out-of-pocket costs over the next
Her numbers add up and
are backed by experts including:
Simon Johnson, the
former Chief Economist at the International Monetary Fund and a professor at
Dr. Donald Berwick,
one of the nation’s top experts in health system management and improvement,
who ran the Medicare and Medicaid programs under President Barack Obama
Mark Zandi, Chief
Economist of Moody’s Analytics
former Chief Economist for the Obama Labor Department
Elizabeth’s plan to
dramatically improve health care and cut family costs would cost the United
States less than our current broken system. It would require $20.5 trillion in
new revenue, nearly half of which comes simply from having employers pay
Medicare instead of private insurance companies.
Elizabeth will finance
the remainder of Medicare for All with targeted defense spending cuts, new
taxes on financial firms, giant corporations, and the richest 1% of Americans,
and by cracking down on tax evasion and fraud. The $11 trillion in household
insurance and out-of-pocket expenses projected under our current system goes
right back into the pockets of America’s working people — substantially larger than the
largest tax cut in American history — and no middle class tax increases.
My daddy’s heart attack nearly sent our family skidding over
a financial cliff. Today I think about all the kids this year who will face the
double blow of nearly losing a parent and then watching their lives turn upside
down as their families struggle to pay a growing stack of medical
I spent my career studying why so many hard-working middle
class families were going broke. For years, my research partners and I traveled
the country from bankruptcy courtroom to bankruptcy courtroom, talking directly
to people who’d seen their lives turned upside down. We interviewed lawyers,
judges, and families involved in bankruptcy cases. To save on printing costs,
we lugged around a Xerox machine (I nicknamed him “R2-D2”) to save money on
photocopying court records.
Eventually, we built the largest and most comprehensive
database of consumer bankruptcy data ever assembled. That first study surprised
us: we found that 90% of families went bankrupt because of job loss, medical
problems, and marital disruption. That finding was confirmed in 2007 by my
later research, which found that the number one reason
families were going broke was health care – and three quarters of
those who declared bankruptcy after an illness were people who already had
It’s been nearly thirty years since we published that first
groundbreaking study. And after all that time, here’s where we are: between
2013 and 2016, the number one reason families
went broke was still because of health care – even though 91.2% of Americans
had health insurance in 2016.
Families are getting crushed by health costs. Just look at
how much an average family of four with employer-sponsored insurance personally
spent per year on employee premium contributions and out-of-pocket
costs in 2018. And this figure has increased each
87 million. That’s
how many American adults in 2018 were uninsured or “underinsured” – meaning
either they have no insurance or their so-called health insurance is like a car
with the engine missing. It looks fine sitting on the lot, but inadequate if
they actually need to use it. Nearly one in every
two adults not currently on Medicare has no insurance or unreliable insurance.
adults didn’t fill a prescription last year because of costs. 36 millionpeopleskipped
a recommended test, treatment, or follow-up because of costs. 40 millionpeople
didn’t go to a doctor to check out a health problem because of costs. 57 millionpeople
had trouble covering their medical bills.
Today, in 2019, in the United States of America, the
wealthiest nation in the history of the world, inadequate health coverage is
crushing the finances and ruining the lives of tens of millions of American
I’m running for President based on a radical idea – calling
out what’s broken and speaking plainly about how to fix it.
All my plans start with our shared values. There are two
absolute non-negotiables when it comes to health care:
One: No American should ever, ever die or go bankrupt
because of health care costs. No more GoFundMe campaigns to pay for care. No
more rationing insulin. No more choosing between medicine and groceries.
Two: Every American should be able to see the doctors they
need and get their recommended treatments, without having to figure out who is
in-network. No for-profit insurance company should be able to stop anyone from
seeing the expert or getting the treatment they need.
Health care is a human right, and we need a system that
reflects our values. That system is Medicare for All.
Let’s be clear: America’s medical professionals are among
the best in the world. Health care in America is world-class. Medicare for All
isn’t about changing any of that.
It’s about fixing what is broken – how we pay for that care.
And when it comes to health care, what’s broken is obvious.
A fractured system that allows private interests to profiteer off the health
crises of the American people. A system that crushes our families with costs
they can’t possibly bear, forcing tens of millions to go without coverage or
to choose between basic
necessities like food, rent, and health – or bankruptcy.
We must fix this system. And over the long-term, the best
way to achieve that goal is to move from the system we have now to a system of
Medicare for All.
Medicare for All is about where doctors, hospitals, and care
providers send the bill – to a collection of private insurance companies who make billions off
denying people care or to the Medicare program for fair compensation. Under
Medicare for All, everyone gets the care they need, when they need it, and
nobody goes broke.
A key step in winning the public debate over Medicare for
All will be explaining what this plan costs – and how to pay for it. This task
is made a hundred times harder by powerful health insurance and drug companies
that makebillions of dollars
off the current bloated, inadequate system – and would be perfectly happy to
leave things exactly the way they are.
In 2017 alone, health industry players whose profiteering
would end under Medicare for All unleashed more than 2,500 lobbyists on
Washington. These industries will spendfreely on shady TV
ads and lobbying to convince people that a program that saves them massive
sums of money will somehow cost them money.
That being able to see the doctors and get the treatments they need regardless
of what their employer or
their insurance company thinks
is somehow actually a loss of choice. That a program that covers more services,
more people, and costs the American people less than what we
currently spend on health care is somehow too expensive.
Meanwhile, where are the 2,500 lobbyists for the people who
get sick and can’t pay their medical bills? Where are the hundreds of
millions being spent so that people who are trying to balance a budget around
rising health care premiums and growing deductibles and copays can make their
voices heard in Washington? Washington hears plenty from the giant health
insurance and giant drug industries, but not so much from families being
squeezed to the breaking point.
So let’s focus on families’ expenses and families’ health
Start with the Medicare for All Act – which
I have cosponsored. The bill provides a detailed proposal for how to achieve
our end goal. But as economists and advocates have noted, the legislation
leaves open a number of key design decisions that will affect its overall cost,
and the bill does not directly incorporate specific revenue measures. While
much of this ambiguity results from the reasonable choice to delegate
significant implementation discretion to the Executive Branch, it has also
allowed opponents of
Medicare for All to make up their own price tags and try to scare middle class
families about the prospect of tax increases – despite the conclusions of expert after expert after expert that it is
possible to eventually move to a Medicare for All system that gives both high
quality coverage for everybody and dramatically lowers costs for middle class
The best way to fight misinformation is with facts. That’s
why today, I’m filling in the details and releasing a plan that describes how I
would implement the long-term policy prescriptions of the Medicare for
All Act and how to pay for it.
Under my plan, Medicare for All will cover the full list of
benefits outlined in the Medicare for All Act, including long-term
care, audio, vision, and dental benefits. My plan will cover every single
person in the U.S., and includes common-sense payment reforms that make
Medicare for All possible without spending any more money overall than we spend
My plan reflects careful, detailed analyses from key
national experts in health policy, tax policy, and economics. By filling in the
details, we can strip away all the misleading political attacks and make plain
the choice facing the American people:
Option 1: Maintain our current system, which will cost
the country $52 trillion over ten years. And under that current system
63 million have
coverage gaps or substandard coverage that could break down if they actually
get sick. And millions who have
health insurance will end up going broke at least in part from medical costs
Together, the American people will pay $11 trillion of
that bill themselves in the form of premiums, deductibles, copays,
out-of-network, and other expensive medical equipment and care they pay for
out-of-pocket – all while America’s wealthiest individuals and
biggest companies pay far
less in taxes than in other major countries.
Option 2: Switch to my approach to Medicare for All,
which would cost the country just under $52 trillion over ten
years. Under this new system –
Every person in America – all 331 million people
– will have full health coverage, and coverage for long-term care.
Everybody gets the doctors and the treatments they need,
when they need them. No more restrictive provider networks, no more insurance
companies denying coverage for prescribed treatments, and no more going broke
over medical bills.
The $11 trillion in
household insurance and out-of-pocket expenses projected under our current
system goes right back into the pockets of America’s working people. And we
make up the difference with targeted spending cuts, new taxes on giant corporations
and the richest 1% of Americans, and by cracking down on tax evasion and
fraud. Not one penny in middle-class tax increases.
That’s it. That’s the choice. A broken system that leaves
millions behind while costs keep going up and insurance companies keep sucking
billions of dollars in profits out of the system – or, for about the same
amount of money, a new system that drives down overall health costs and, on
average, relieves the typical middle class families of $12,400 in insurance
premiums and other related health care costs.
No middle class tax increases. $11 trillion in household
expenses back in the pockets of American families. That’s substantially larger than the
largest tax cut in American history.
Not every candidate for president supports moving to a
system of Medicare for All. Some who support Medicare for All will have
different ideas about how to finance and structure it. And everybody knows that
there must be a real transition. But you don’t get what you don’t fight for –
and my view is clear.
Every candidate who opposes my long-term goal of Medicare
for All should explain why the “choice” of private insurance plans is
more important than being able to choose the doctor that’s best for you without
worrying about whether they are in-network or not. Why it’s more important than
being able to choose the right prescription drug for you without worrying about
massive differences in copays. Why it’s more important than being able to
choose to start a small business or choose the job you want without worrying
about where your health care coverage will be coming from and how much it will
Every candidate who opposes my long-term goal of Medicare
for All should put forward their own plan to cover everyone, without costing
the country anything more in health care spending, and while putting $11
trillion back in the pockets of the American people by eliminating premiums and
virtually eliminating out-of-pocket costs. Or, if they are unwilling to do
that, they should concede that they think it’s more important to protect the
eye-popping profits of private insurers and drug companies and the immense
fortunes of the top 1% and giant corporations, rather than provide
transformative financial relief for hundreds of millions of American
And every candidate who opposes my long-term goal of
Medicare for All should put forward their own plan to make sure every single
person in America can get high-quality health care and won’t go broke – and
fully explain how they intend to pay for it. Or, if they are unwilling to do
that, concede that their half-measures will leave millions behind.
And make no mistake – any candidate who opposes my long-term
goal of Medicare for All and refuses to answer these questions directly should
concede that they have no real strategy for helping the American people address
the crushing costs of health care in this country. We need plans, not
THE COST OF MEDICARE FOR ALL
A serious conversation about how to pay for Medicare for All
requires, first, determining how much such a system would cost.
In recent years, several economists and think tanks have
attempted to estimate the cost of a single-payer system in the United States.
Those estimates consider how much our nation’s health care spending will change
over a ten year window, and range from a $12.5 trillion decrease
to a $7 trillion increase.
They also consider how much additional money the federal government would need
to fund this system, and those estimates range from a low of $13.5 trillion to a
high of $34 trillion over
Because nobody can actually see the future, some of this
variation results from different assumptions about how parts of our health care
system might work differently under Medicare for All. But most of the
difference comes from policy choices. And while the Medicare for All
Act is clear about some of these choices – for example, generous
benefits, long-term care coverage, and virtually no out-of-pocket expenses – it
is silent on a number of really important ones. How much will we pay for
medical care and for prescription drugs? What do we do with the existing money
that states spend on Medicaid? How aggressively will we cut administrative
costs? Aggressive choices mean a lower total cost. Less aggressive choices
result in a higher total cost.
Serious candidates for president should speak plainly about
these issues and set out their plans for cost control – especially those who
are skeptical of Medicare for All. Because whether or not we make modest or
transformative changes to our health care system, cancer, diabetes, strokes,
Alzheimer’s, and Parkinson’s aren’t going to simply disappear. And without
leadership from the top, neither will the mushrooming cost of care in America
that’s bankrupting our families.
I’ve asked top experts to consider the long-term cost of my
plan to implement Medicare for All over ten years – Dr. Donald Berwick, one of
the nation’s top experts in health system improvement and who ran the Medicare
and Medicaid programs under President Obama; and Simon Johnson, the former
Chief Economist at the International Monetary Fund and a professor at MIT.
Their analysis begins with the assumptions of a recent study by the Urban
Institute and then examines how that cost estimate would change as certain new
key policy choices are applied. These experts conclude that my plan would slightly
reduce the projected amount of money that the United States would otherwise
spend on health care over the next 10 years, while covering everyone and giving
them vastly better coverage.
REDUCING INSURER ADMINISTRATIVE COSTS
The business model of private insurers is straightforward:
pay out less for medical care than they take in as premiums. This model is
located right in the center of our health care system, wasting huge amounts of
time and money documenting and arguing over who is owed what. Incredibly,
insurance companies spend a whopping $350 billion on
administration costs annually—and then, in turn, push huge additional
administrative costs onto hospitals, doctors, and millions of other health care
professionals in the from of complex billing—and then, in turn, drive up costs
incurred by employers as they attempt to navigate the complexity of providing
their employees with insurance.
Medicare for All will save money by bringing down the
staggering administrative costs for insurers in our current system. As the
experts I asked to evaluate my plan noted, private insurers had administrative
costs of 12% of premiums collected in 2017, while Medicare kept its
administrative costs down to 2.3%. My plan will ensure that Medicare for All
functions just as efficiently as traditional Medicare by setting net
administrative spending at 2.3%.
COMPREHENSIVE PAYMENT REFORM
In 2016, the United States spent nearly twice as
much on health care as ten high-income countries, and these costs have
been steadily rising for
decades, growing from 5.2%
of U.S. GDP in 1963 to 17.9% in 2017. But
instead of resulting in better health outcomes, Americans have the lowest
life expectancy of residents in high-income countries, the highest infant
mortality rate, and the highest obesity rates.
Why? As a group of health economists famously wrote, “It’s the prices,
Studieshave continued to
show that it’s not how much people use the health care system, often referred
to as “utilization,” but rather how much people pay that drives our high spending.
Compared to other high income countries, Americans simply pay more for health
care. We pay more for physicians and nurses. We pay more in administrative
costs. We pay more for prescription drugs.
A heart bypass surgery that costs nearly
$16,000 in the Netherlands costs an average of $75,000 in the United States. A
CT scan that costs $97 in Canada
costs an average of $896 here. And in the United States, hospitals can charge new parents
for holding their newborn after delivery.
Meanwhile, private equity firms fight bipartisan
legislation in Washington that might undermine the profitability of their
investments or prevent their hospitals from sending patients surprise bills.
And health care CEO salaries continue to soar. Between 2005 and 2015,
non-profit hospital CEO salaries increased by 93% to
an average of over $3 million, and last year, 62 health care CEOs raked in a
combined $1.1 billion – more
than the CDC spent on chronic disease prevention.
If we expect the American people to be able to afford health
care, we need to rein in these costs. Comprehensive payment reform, as part of
Medicare for All, will reduce this component of health care spending. Under my
approach, Medicare for All will sharply reduce administrative spending
and reimburse physicians and other non-hospital providers at current Medicare
rates. My plan will also rebalance rates in a budget neutral way that
increases reimbursements for primary care providers and lowers reimbursements
for overpaid specialties.
While private insurance companies pay higher rates, this system would be
expected to continue compensating providers at roughly the same overall rate
that they are currently receiving. Why? This is partially because providers
will now get paid Medicare rates for their Medicaid patients – a substantial
raise. But it’s also because providers spend an enormous amount of time on
billing and interacting with insurance companies that reduces their efficiency
and takes away from time with patients. Some estimate that hospitals will spend $210 billion on
average annually on these costs.
The nonpartisan Institute of Medicine estimates that
these wasted expenses account
for 13% of the revenue for physician practices, 8.5% for hospitals, and 10% for
other providers. Together, the improved efficiency will save doctors time and
money – helping significantly offset the revenue they will lose from
getting rid of higher private insurance rates.
Under my approach, Medicare for All will sharply
reduce administrative spending and reimburse hospitals at an average of 110% of
current Medicare rates, with appropriate adjustments for rural hospitals,
teaching hospitals, and other care providers with challenging cost structures.
In 2017, hospitals that treated Medicare patients were paid about 9.9% less than
what it cost to care for that patient. The increase I am proposing under
Medicare for All will cover hospitals’ current costs of care – but hospital
costs will also substantially decrease as a result of simpler administrative
processes, lower prescription drug prices, the end of bad debt from
uncompensated care, and more patients with insurance seeking care.
Of course, as Medicare currently recognizes,
not every provider situation is the same, and my Medicare for All program
maintains these base rate adjustments for geography and other factors. In
my plan for Rural
America, for example, I have committed to creating a new designation under
Medicare for rural hospitals due to the unique challenges health systems face
in rural communities. That’s why my plan allows for adjustments above the 110%
average rate for certain hospitals, like rural and teaching hospitals, and
below this amount for hospitals that are already doing fine with current
Medicare rates.Universal coverage will also have a
disproportionately positive effect on rural hospitals. Because people living in
rural counties are more likely to be
uninsured than people living in urban counties, these hospitals currently
provide a lot of uncompensated care. Medicare for All fixes that problem. And
I’ve previously laid out additional
investments to increase the number of Community Health Centers and grow our
health care workforce in rural and Native American communities, while cracking
down on anti-competitive mergers that lead to worse outcomes and higher costs
for rural communities.
We can also apply a number of common-sense, bipartisan
reforms that have been proposed for Medicare. Today, for example, insurers can
charge dramatically different prices for the exact same service based on where the service was
performed. Under Medicare for All, providers will receive the same
amount for the same procedure, saving hundreds of billions of dollars. We can
also make adjustments to things that we know Medicare currently pays too much
for – like post-acute care – by adjusting those payments down slightly while
accounting for the patient’s health status, bringing health care costs down
We will also shift payment rates so that we are paying for
better outcomes, instead of simply reimbursing for more services. We build on
the success of value-based reforms enabled by the Affordable Care Act,
including by instituting bundled payments for inpatient care and for 90 days of
post-acute care. Instead of paying providers for each individual service,
bundled payments reimburse providers for an entire “episode” of care and have
been shown to both improve outcomes and control costs. These
bundles help ensure that a patient’s different providers all communicate because
they are all tied to the same payment.
RESTORING HEALTH CARE COMPETITION
Health care consolidation has also contributed to
rising health care costs. One analysis found that over 90% of
metropolitan areas had health care provider markets that were either highly
concentrated or super concentrated in 2016. And despite the same kinds of empty
promises we see every time there’s industry consolidation – in this case, that
bigger hospitals would lead to better care – the data have not borne
this out. In fact, it’s theopposite: more
competition between providers creates incentives to improve care, and that
incentive will only increase under a
Medicare for All system where quality, not price, is the main differentiator in
Under Medicare for All, hospitals won’t be able to force
some patients to pay more because the hospital can’t agree with their insurance
company. Instead, because everyone has good insurance, providers will have to
compete on better care and reduced wait times in order to attract more
That’s why I will appoint aggressive antitrust enforcers to
the Department of Justice and Federal Trade Commission and allow hospitals to
voluntarily divest holdings to restore competition to hospital markets. I’ve
also previously committed to
strengthening FTC oversight over health care organizations, including
non-profit hospitals, to crack down on anti-competitive behavior. And I will
direct my FTC to block all future hospital mergers unless the merging companies
can prove that the newly-merged entity will maintain or improve care.
REINING IN OUT-OF-CONTROL PRESCRIPTION DRUG COSTS
Americans pay more for prescription drugs than anyone in the
world – $333 billion in
2017 alone. Americans spent $1,220 per person on
average for prescription drugs, while the next highest spending country,
Switzerland, spent $963 per person. That’s not because Americans use more
prescription medication – it’s because lax laws have allowed pharmaceutical
companies to charge insurance companies and patients exorbitant rates. In a
now-infamous example, when Turing Pharmaceuticals purchased the rights to the
HIV medication Daraprim, the company raised the price of
this life-saving drug from $13.50 per pill to a stunning $750 per tablet overnight.
The price of insulin has skyrocketed, forcing
people to risk their lives by rationing. And as prices continue to rise, more
Americans are turning to Canada in
search of affordable prices.
Reining in prescription drug costs should be a top priority
for any President – and there’s no better way to do it than through Medicare
for All. My administration will use a suite of aggressive policy tools to set a
net savings target that will bring down Medicare prices for brand name
prescription drugs by 70% and prices for generics by 30%, with an initial focus
on more expensive drugs.
Under Medicare for All, the federal government would have
real bargaining power to negotiate lower prices for patients. I will adopt an
altered version of the mechanism outlined in the Lower Prescription
Drug Costs Now Act which leverages excise taxes to bring manufacturers
to the table to negotiate prices for both branded and generic drugs, with no
drug exceeding 110% of the average international market price, but removes the
limit of the number of drugs Medicare can negotiate for and eliminates the
“target price” so Medicare could potentially negotiate prices lower than other
If negotiations fail, I will use two tools – compulsory
licensing and public manufacturing – to allow my administration to ensure
patient access to medicines by either overriding the patent, as modeled in
the Medicare Negotiation and Competitive Licensing Act, or by
providing public funds to support manufacturing of these drugs, as modeled in
my Affordable Drug Manufacturing Act. Medicare for All will also
incentivize pharmaceutical companies to develop the drugs we need – like
antibiotics, cancer cures, and vaccines. And it’s not just about driving down
drug prices. Making sure patients get important drug therapies up front that
keep them healthy and cost a fraction compared to more severe treatment down
the line can save money overall. Insurers, who may only cover individuals for a
few years of their lives, see those investments in long-term health as a cost
they’ll never recoup – so they have a financial incentive to deny patients these
treatments. But Medicare for All covers each patient for their entire lifespan.
There’s no perverse incentive to deny the prescriptions they need today because
the long-term benefits to their health won’t benefit their current private
STEMMING THE GROWTH OF MEDICAL COSTS
Year after year, U.S. health spending has grown at rates
above GDP growth, reaching a whopping 17.9% of GDP in
2017. Experts believe the changes to prescription drug spending and value-based
payment systems that I’ve already outlined will bring growth rates in line with
U.S. GDP, which CBO projects to be an average of 3.9% for
the next decade. And if growth rates exceed this rate, I will use available
policy tools, which include global budgets, population-based budgets, and
automatic rate reductions, to bring it back into line.
REDIRECTING TAXPAYER-FUNDED HEALTH SPENDING
Through Medicaid and public health plans for state
employees, state and local governments play a significant role in financing
health care coverage in America. Under my approach to Medicare for All, we will
redirect $6 trillion in existing state and local government insurance spending
into the Medicare for All system. This is similar to the mechanism that the
George W. Bush Administration used to redirect Medicaid spending to the federal
government under the Medicare prescription drug program.Under this
maintenance-of-effort requirement, state and local governments will redirect
$3.3 trillion of what they currently spend to support Medicaid and the
Children’s Health Insurance Program and $2.7 trillion of what they currently
spend on employer contributions to private insurance premiums for their
employees into Medicare for All. Because we bring down the growth rate of
overall health spending, states will pay less than they would have without
Medicare for All. They’ll also have far more predictable budgets, resulting in
improved long-term planning for state and community priorities.
Together, these policy choices represent significant
reductions in health care spending over current levels. Compared to the
estimate by the Urban Institute, they will save over $7 trillion over ten
years, bringing the expected share of additional federal revenue to just over
$26 trillion for that period. After incorporating the $6 trillion we will
redirect from states to help fund Medicare, the experts conclude that total
new federal spending required to enact Medicare for All will be $20.5 trillion.
PAYING FOR MEDICARE FOR ALL
Medicare for All puts all health care spending on the
government’s books. But Medicare for All is about the same price as our current
path – and cheaper over time. That means the debate isn’t really about
whether the United States should pay more or less. It’s about who should
Right now, America’s total bill for health care is projected
to be $52 trillion for the next ten years. That money will come from four
places: the federal government, state governments, employers, and individuals
who need care. Under my approach to Medicare for All, most of these funding
sources will remain the same, too.
Existing federal spending on Medicare and Medicaid will help
fund Medicare for All.
Existing state spending on health insurance will continue in
the form of payments to Medicare – but states would be better off because
they’d have more long-term predictability, and they’d pay less over time
because these costs will grow more slowly than they do today.
Existing total private sector employer contributions to
health insurance will continue in the form of contributions to Medicare – but
employers would be better off because under the design of my plan, they’d pay
less than they would have otherwise.
Here’s the main difference: Individual health care
Over the next ten years, individuals will spend $11 trillion
on health care in the form of premiums, deductibles, copays, and out-of-pocket
costs. Under my Medicare for All plan, that amount will drop from $11
trillion to practically zero.
I asked top experts – Mark Zandi, the Chief Economist of
Moody’s Analytics; Betsey Stevenson, the former Chief Economist for the Obama
Labor Department; and Simon Johnson – to examine options for how we can make up
that $11 trillion difference. They conclude that it
can be done largely with new taxes on financial firms, giant corporations, and
the top 1% – and making sure the rich stop evading the taxes we already have.
That’s right: We don’t need to raise taxes on the
middle class by one penny to finance Medicare for All.
Here’s how it would work.
REPLACING EMPLOYER HEALTH SPENDING WITH A NEW EMPLOYER
Let’s start with a basic fact: American companies are
already paying a lot for health care for their employees. They are projected to
pay nearly $9 trillion over the next ten years, mostly on employer
contributions for employee health insurance and on health-related expenses for
employees under workers’ compensation and long-term disability. My idea is that
instead of these companies sending those payments to private insurance
companies, they would send payments to the federal government for Medicare in
the form of an Employer Medicare Contribution.
In fact, it’ll be a better deal than what they have
now: companies will pay less than they otherwise would have, saving
$200 billion over the next ten years.
To calculate their new Employer Medicare Contribution,
employers would determine what they spent on health care over the last few
years and divide that by the number of employees of the company in those years
to arrive at an average health care cost per employee at the company.
(Companies would count part-time employees towards the total based on the
number of hours they worked during a year.) Under the first year of Medicare
for All, employers would then take that average cost, adjust it upwards to
account for the overall increase in national health care spending, and multiply
it by their total number of employees that year. Their Employer Medicare
Contribution would be 98% of that amount – ensuring that every company
paying for health care today will pay less than they would have if they were
still offering their employees comparable private insurance.
A similar calculation would apply to pass-through entities,
like law firms or private equity funds, even though many of the people that
work there technically aren’t employees. People who are self-employed would be
exempt from making Employer Medicare Contributions unless they exceed an income
Small businesses – companies with under 50 employees – would
be exempt from this requirement too if they aren’t paying for employee health
care today. When either new or existing firms exceed this employee threshold,
we would phase in a requirement that companies make Employer Medicare Contributions
equal to the national average cost of health care per employee for every
employee at that company. Merging firms would pay the weighted average cost of
health care per employee of the two firms that are merging.
Employers currently offering health benefits under a
collective bargaining agreement will be able to reduce their Employer Medicare
Contribution if they pass along those savings to workers in the form of
increased wages, pensions, or other collectively-bargained benefits. New
companies or existing companies who enter into a collective bargaining
agreement with their employees after the enactment of Medicare for All will be
able to reduce their Employer Medicare Contributions in the same way. Employers
can reduce their contribution requirements all the way down to the national
average health care cost per employee.
That way, my plan helps unions that have bargained
for good health care already, and creates a significant new incentive for
unionization generally by making collective bargaining appealing for both
workers and employers as a way of potentially reducing the employer’s Employer
Over time, an employer’s health care cost-per-employee would
be gradually shifted to converge at the average health care cost-per-employee
nationally. That helps make sure the system is fair but also gives
employers and employees time to adapt to the new system.
If we’re falling short of the $8.8 trillion revenue target
for the next ten years, we will make up lost revenue with a Supplemental
Employer Medicare Contribution requirement for big companies with extremely
high executive compensation and stock buyback rates.
There are a variety of ways to structure an employer
contribution to Medicare for All. This particular approach has the benefit of
helping American employers in a few ways:
Employers would collectively save $200 billion over the next
Employers receive far more certainty about how their health
care costs will vary over time and affect their finances.
Small businesses – who often suffer when competing for
employees because they can’t afford to
offer health care coverage – would no longer be at a competitive disadvantage
against bigger businesses.
Employers can reduce their Employer Medicare Contribution by
supporting unionization efforts and negotiating with workers to provide better
wages and benefits – reducing costs and promoting collective bargaining at the
Because my plan holds health care cost growth to GDP levels,
businesses will have stable balance sheets that grow with the economy instead
of crowding out other priorities.
By asking employers to pay a little less than what they
are already projected to pay for health care, we can get almost halfway to
where we need to go to cover the cost of my Medicare for All plan.
Automatic Increases in Take-Home Pay
Medicare for All puts a whole lot of money back in the
American people’s pockets. One way it does that is by taking the share of
premiums employees are responsible for paying through employer-sponsored
insurance – that line on pay stubs each week or month that says “health
insurance” – and returning it to working people. Congratulations on the
And higher take-home pay for workers also means additional
tax revenue just from applying our existing taxes – approximately $1.15
trillion if we apply average effective tax rates.
Medicare for All saves people money in other ways too. With
Medicare for All, nobody would need to put money in Health Savings Accounts or
medical savings accounts to try and protect themselves against the unthinkable.
And because individual spending on premiums, deductibles, copays, and
out-of-pocket costs will basically disappear, the tax break for medical
expenses in excess of 10% of Adjusted Gross Income becomes irrelevant.
Together, those changes would generate another
$250 billion in revenue.
All told, another $1.4 trillion in funding for Medicare for
All is generated automatically through existing taxes on the enormous amount of
money that will now be returned to individuals’ pockets from moving to a
Medicare for All system with virtually no individual spending on health
Here’s what that means: we can generate almost half
of what we need to cover Medicare for All just by asking employers to pay
slightly less than what they are projected to pay today, and through existing
So where does the rest of the money come from that allows us
to eliminate premiums, deductibles, copays, and most out-of-pocket spending for
every American? Four sources: (1) better enforcement of our existing tax laws
so we stop letting people evade their tax obligations; (2) targeted taxes on
the financial sector, large corporations, and the top 1% of individuals; (3) my
approach to immigration; and (4) shutting down a slush fund for defense
CRACKING DOWN ON TAX EVASION AND FRAUD
The federal government has a nearly 15% “tax gap”
between what it collects in taxes what is actually owed because of systematic
under-enforcement of our tax laws, tax evasion, and fraud. If that 15% gap
persists for the next ten years, we will collect a whopping $7.7 trillion less in
federal taxes than the law requires. By investing in stronger
enforcement and adopting best practices on tax reporting, withholding, and
filing, experts predict that we can close the tax gap by a third – generating
about $2.3 trillion in additional federal revenue without a single new
A big part of our current tax gap problem is that we’re letting
wealthier taxpayers get away with paying less than what they owe. Studies show that the
wealthiest 5% of taxpayers misrepresent their income more frequently than the
The wealthy and their allies in Washington have worked
to slash the IRS
budget, leaving it without the resources it needs. The agency today has about the
same number of revenue agents as it did when the economy was one-seventh its
current size in the 1950s. And the IRS insists on targeting low-income
taxpayers rather than wealthy ones, even though the amount of revenue we can
recover from wealthy taxpayers is far more.
We know how to fix this problem. We can draw lessons from
what works in other countries with much lower tax gaps and rely on the
recommendations of tax experts. Here’s a game plan:
Substantially increase funding for the IRS, including the
Criminal Investigation Division. The Treasury Department estimated in its
Fiscal Year 2017 budget request that every $1 invested in IRS enforcement
brings in nearly $6 in additional revenue – not even including an indirect
deterrence effect three times that amount.
Expand third-party reporting and withholding requirements.
Research shows that third-party reporting and withholding cuts down on the
tax misreporting rate substantially.
Strengthen enforcement of the Foreign Account Tax Compliance
Act (FATCA). FATCA requires foreign financial institutions to report the
holdings and income of U.S. taxpayers, but the IRS is generally not systematically matching these
reports to individual tax returns. We also don’t hold foreign financial firms
truly accountable for ignoring their reporting obligations. Automatically
matching FATCA reports to tax returns and instituting sanctions for
non-compliant foreign financial institutions would help narrow the tax gap.
Increase the nonfiler compliance program, strengthen
reporting requirements for international income, use existing currency
transaction reports to enforce cash income compliance, and increase reporting
requirements for virtual- or crypto-currencies, as suggested by the
Treasury Department’s Inspector General.
Allow employees who
disclose tax evasion and abuse to use the protections of the False Claims Act
and other whistleblower protections.
The experts who reviewed these ideas estimated that if we
implemented them, we could close the tax gap by one-third from 15% to 10%,
bringing us closer to the tax gap in countries like the United Kingdom (5.6%). That will
produce another $2.3 trillion in net federal revenue – without imposing a
single new tax.
TARGETED TAXES ON THE FINANCIAL SECTOR, LARGE
CORPORATIONS, AND THE TOP 1%
We can generate a whole lot of the remaining revenue we need
for Medicare for All just by eliminating bad incentives in our current tax
system and asking those who have done really well in the last few decades to
pay their fair share.
Let’s start with the financial sector. It’s been more than
ten years since the 2008 financial crisis, and while a lot of families
are still dealing with
the aftereffects, the financial sector is making record, eye-popping profits.
Meanwhile, the risk of another financial crisis remains unacceptably high. By
imposing targeted taxes and fees on financial firms, we can generate needed
revenue and also make our financial system safer and more secure.
For example, a small tax on financial transactions –
one-tenth of one percent on the sale of bonds, stocks, or derivatives – would
generate about $800 billion in
revenue over the next ten years. The tax would be assessed on and
collected from financial firms, and would likely have little to no effect on
most investors. Instead, according to experts, the tax could
help decrease what Americans pay in fees for their investments and reduce the
size of relatively unproductive parts of the financial sector.
We can also impose a fee on big banks that encourages them
to take on fewer liabilities and reduce the risk they pose to the financial
system. A small fee that applies only to the forty or so largest banks in the
country would generate an additional $100 billion over
the next ten years – while making our financial system more safe and
Next, we can make some basic changes to ensure that large
corporations pay their fair share and to fix some fundamental problems with our
current approach that actually encourage companies to shift jobs and investment
overseas. These changes will generate an estimated $2.9 trillion over
the next ten years.
For instance, our current tax system lets companies deduct
the cost of certain investments they make in assets faster than those assets
actually lose value. That means that if a company buys a machine for a million
dollars, it gets to deduct a million dollars from its taxes that same year –
even if the machine only loses $100,000 in value a year. Letting the company
write off the extra $900,000 all at once is like giving them an interest-free loan from
That might be worth it if the company responded to this tax
break by investing more and building out their businesses. But the datasuggest this isn’t
happening because companies don’t actually value these tax deferrals as much as
policymakers assume. Companies are mostly making the same investments they
would’ve made anyways – sometimes with small changes in timing – and getting a
write-off in exchange. Some experts even suggest that
accelerated expensing could induce less domestic investment,
That’s why I’m proposing to get rid of this loophole. Under
my plan, businesses will still write off the depreciation of their assets –
they’ll just do it in a way that more accurately reflects the actual loss in
value. This would generate $1.25 trillion over
We can also stop giant multinational corporations from
calling themselves American companies while sheltering their profits in foreign
tax havens to avoid paying their share for American investments.
Currently, a U.S. multinational corporation can make
billions in profits and attribute it to a company it set up in a tax haven like
the Cayman Islands, which has no corporate taxes. The Trump tax bill claimed to
address that problem by creating a global minimum tax rate for corporations,
but that minimum tax – the result of heavy lobbying by
multinationals – is too low and easily gamed. While Trump and congressional
Republicans claimed their
minimum tax would keep companies from shifting profits to tax havens and limit
offshoring, the opposite is happening. The current
approach bothencourages companies
to shift their profits to tax havens and actually incentivizes American
companies to outsource their operations overseas.
That’s why I’m proposing to institute a country-by-country minimum
tax on foreign earnings of 35% – equal to a restored top corporate tax rate for
U.S. firms – without permitting corporations to defer those payments. Under
my plan, corporations would have to pay the difference between the minimum tax
and the rate in the countries where they book their profits. For example, an
American corporation booking a billion dollars in profits in the Cayman
Islands, taxed at 0% there, would need to pay the federal government a 35% tax
rate – the difference between the new minimum rate (35%) and the foreign rate
(0%) – on the billion dollars in profits.
My plan would also collect America’s fair share of profits
that foreign companies make by selling their products to Americans. Today, we
have a “global tax deficit”: companies that sell their goods abroad don’t have
to pay the extra taxes that they would have to pay if they were subject to a
minimum effective tax rate in each country they operated in. Making U.S. firms
pay a country-by-country minimum tax effectively collects their whole global
tax deficit – but foreign companies should have to pay their fair share, too.
That’s why I’m proposing that the U.S. collect the fraction of this global tax
deficit that corresponds to the percentage of that company’s sales in the U.S.
In other words, if a foreign company should owe an additional $1 billion in
taxes if it were subject to a country-by-country minimum tax, the U.S. would
collect a fraction of that $1 billion based on the amount of sales that company
made in the United States.
Together, the country-by-country minimum tax and the
taxation of foreign firms based on their domestic sales would result in an
additional $1.65 trillion in
Finally, we can raise another $3 trillion over ten years by
asking the top 1% of households in America to pay a little more.
The tax burden on ultra-millionaires and billionaires is
less than half that of working families in the United States. In 2019, the
bottom 99% of families will pay 7.2% of their wealth
in taxes, while the top 0.1% of households will pay just 3.2%. My Ultra-Millionaire Tax, a
2-cent tax on the wealth of fortunes above $50 million, tackles this head on.
Under this tax, the top 0.1% – the wealthiest 75,000 Americans – would have to
pitch in two cents for every dollar of net worth above $50 million and three
cents for every dollar on net worth over $1 billion. With this version of the
Ultra-Millionaire Tax in place, the tax burden on the wealthiest households
would increase from 3.2% to 4.3% of total
wealth – better, but still below the 7.2% that the bottom 99% are projected to
Today, I’m going one step further. By asking
billionaires to pitch in six cents on each dollar of net worth above $1
billion, we can raise an additional $1 trillion in revenue and further close
the gap between what middle-class families pay as a percentage of their wealth
and what the top one-tenth of one percent pay.
Yes, billionaires will have to pay a little more, but they
will still likely pay less than what they would earn just from putting their
assets into an index fund and doing nothing. The average annual rate of return
of the S&P 500 has regularly topped 10%. And billionaires
have access to the kinds of fancy investment opportunities that can generate
even higher returns on average. Put it this way – should we ask billionaires to
pitch in an extra three cents on every dollar above $1 billion, or force
middle-class families to bear another $1 trillion in health care costs?
We can also change the way the government taxes investment
income for the top 1%. Today, taxes are only assessed on capital gains when securities are sold.
That means wealthy investors can put their money in the stock market, see it
grow, and not pay a dime in
taxes on those earnings unless or until it is taken out of the market. Under
the current system, they can then pass along those shares to their heirs when
they die and their heirs will be able to pay even less when
they choose to sell.
I’ve already proposed closing that loophole for how capital
gains are treated when shares are passed on to heirs. But we can go a step
further. Under a “mark-to-market” system for
the wealthiest 1% of households, we will tax capital gains income (excluding
retirement accounts) annually, rather than at the time of sale, and raise the
rates on capital gains to match the tax rates for labor income. Individuals
would still only pay taxes on gains and could use current losses to offset
Under this system, investment income will no longer be
treated differently than labor income for the top 1% of households.
Ultra-millionaires and billionaires won’t be able to earn income on giant
fortunes year after year without paying a penny in taxes. Andwe
can raise another $2 trillion over
ten years to pay for my Medicare for All plan.
I support immigration reform that’s consistent with our
values, including a pathway to citizenship for undocumented immigrants and
expanded legal immigration consistent with my principles. That’s not only the
right thing to do – it also increases federal revenue we can dedicate to
Medicare for All as new people come into the system and pay taxes. Based on
CBO’s analysis of the 2013 comprehensive immigration reform bill, experts
project that immigration reform would generate an additional $400 billion in
direct federal revenue.
REINING IN DEFENSE SPENDING
Since the attacks of 9/11, the United States has
appropriated $2 trillion to fund
combat and counterterrorism operations around the world via the Overseas
Contingency Operations fund, or OCO. On average this spending has amounted
to $116 billion per
year – and in total, an amount equivalent to nearly 10 percent of all
federal discretionary spending over that same time period.
including the President’s current Chief of Staff – and Democrats alike
agree that OCO is a budget gimmick that masks the true impact of war spending.
The emergency supplemental funding mechanism was never intended to fund the
costs of long-scale, long-term operations outside of the normal appropriations
process. And in recent years, OCO has also been used to fund so-called “base”
requirements unrelated to the wars, outside of the Budget Control Act caps – in
effect acting as a slush fund for increased Pentagon spending. And as
everything from more F-35s to massive bombs never
used in combat have migrated into the OCO account, the Department of Defense
has been spared from having to prioritize or live
within its means. It’s not just bad budgetary practice – it’s wasteful
I’ve called out this
slush fund for what it is. I’ve also called for an end to endless
combat engagements in places like Afghanistan, Iraq, and Syria, and to
responsibly bring our combat troops home from these nations. These open-ended
commitments are not necessary to advance American foreign policy or
counterterrorism interests, their human cost has been staggering, and their
financial cost has created a drag on our economy by diverting money better
invested in critical domestic priorities.
I’ve also called to reduce defense spending overall.
The Pentagon budget will cost more this year than
everything else in the discretionary budget put together. That’s wrong, and
it’s unsustainable. We need to identify which programs actually benefit American
security in the 21st century, and which programs merely line the pockets of
defense contractors – then pull out a sharp knife and make some cuts.
As I have said repeatedly, under my Medicare for All plan,
costs will go up for the very wealthy and big corporations, and costs will go
down for middle-class families. I will not sign a bill that violates these
commitments. And as my plan to pay for Medicare for All makes clear, we can
meet these commitments without a tax increase on the middle class – and, in
fact, without any increase in income taxes at all.
America’s middle class is facing a crisis. For a generation,
wages have remained largely flat while family costs have exploded. I’ve spent
decades sounding the alarm about it. I’m running for President to fix it. That
means doing whatever we can to reduce the overall strain on family budgets.
Medicare for All can be a huge part of the solution. When
fully implemented, my approach to Medicare for All would mark one of the
greatest federal expansions of middle class wealth in our history. And
if Medicare for All can be financed without any new taxes on the middle class,
and instead by asking giant corporations, the wealthy, and the well-connected
to pay their fair share, that’s exactly what we should do.
ACHIEVING MEDICARE FOR ALL
Of course, moving to this kind of system will not be easy and
will not happen overnight. This is why every serious proposal for Medicare for
All contemplates a significant transition period.
In the weeks ahead, I will propose a transition plan that
will specifically address how I would use this time to begin providing
immediate financial relief to struggling families, rein in out-of-control
health care costs, increase coverage, and save lives. My transition plan will
take seriously and address substantively the concerns of unions, individuals
with private insurance, hospitals, people who work for private health insurers,
and medical professionals who worry about what a new system will mean for them.
It will also grapple directly with the entrenched political and economic
interests that would spend freely, as they havethroughout modern
American history, to influence politicians and
try to frighten the
American people into rejecting a plan that would save them thousands of dollars a year on
premiums and deductibles while making sure they can always see the health care
providers they need with false claims and scare tactics.
But there’s a reason former President Barack Obama has called Medicare for
All a good idea. There’s a reason the American people support it. It’s
because when it comes to the cost of health care, we are in the middle of a
We are paying twice as much as
any other major nation for care – even as tens of millions lack
coverage, and even as family after family sees its finances destroyed by a
health issue. And the American people know that in the
long-term, a simple system that covers everybody, provides the care they need
when they need it, puts $11 trillion back in their pockets and uses all of the
public’s leverage to keep costs as low as possible is the best option for their
family budgets and for the health of their loved ones.
As President, I’ll fight to get it done.
Read the plan here
Read expert letter on cost estimate of Medicare for All here
Read expert letter on financing Medicare for All here
Governor Andrew M. Cuomo and Attorney General Barbara D. Underwood today filed a lawsuit to protect New York and its taxpayers from Washington’s drastic curtailment of the State and Local Tax (SALT) deduction. The lawsuit, which was joined by Connecticut, Maryland, and New Jersey, argues that the new SALT cap was enacted to target New York and similarly situated states, that it interferes with states’ rights to make their own fiscal decisions, and that it will disproportionately harm taxpayers in these states.
Accusing the federal government of engaging in a host of un-American actions – ranging from Zero Tolerance for immigrants seeking asylum, to pushing oil and gas drilling off coasts, to the failure of the Trump Administration to sufficiently protect elections and critical infrastructure against cyberattacks by Russia and other foreign adversaries- he cited the tax reform act’s SALT provision as “un-American.”
“Put aside the philosophy and the top 1 percent getting 80 percent of the benefits, the so-called SALT provision was un-American. What you did was you divided the states, you penalized the democratic states.”
In a phone conference call with the press, Cuomo said that the lawsuit is being filed in the district court of the Southern District of New York, and seeks declaratory judgment that it is unconstitutional and injunctive relief.
“There are three causes of action that the lawsuit will lay out. The first one is that it’s a violation of the Tenth Amendment which was ratified in 1791. The Tenth Amendment prohibits the federal government from invading the sovereign tax authority of the states. Remember, the founding fathers who they loved to quote, these are co-equal sovereign the federal government and the states. That was the basis of the Constitution.
“And the Tenth Amendment prohibited the federal government from invading a state’s tax authority. And that’s what they did by their own admission. Secretary Mnuchin said, the purpose of the law was ‘to send a message to the state governments that they have to get their budgets in line.’ Ted Cruz said, ‘we want to get states to lower their taxes.
Paul Ryan said the same thing. This was their attempt to manipulate state governments.
The second cause of action is that it’s a violation of the 16th Amendment that was ratified in 1913, which states the federal government may not exercise its power to tax individual incomes without providing for deduction of state and local taxes. Alexander Hamilton was cited: “the individual states would under the proposed Constitution retain an independent and uncontrollable authority to raise revenue to any extend of which they may stand in need. By every kind of taxation except duties on imports and exports.” James Madison said, “the state’s status as co-equal sovereigns provided security against interference from the federal government.”
The third cause of action is a violation of Article 1 Section 8 of the Constitution that says, ‘the Congress has the power to lay and collect taxes, duties, impose excises to pay debts, and provide for the common defense and general welfare, but it may not use its tax and spending authorities to exert a power akin to undue influence over the states or coerce the states into adopting policies preferred by the federal government.’ That goes back to case law to 1937.
Cuomo cited Abraham Lincoln when he passed the first federal income tax—the Revenue Act of 1862— “state and local taxes shall first be deducted to determine a taxpayer’s liability for the federal income taxes.” Justin Morrill in 1862, stated”‘as a matter of simple logic, the deduction is necessary to avoid both double taxation and the principle of federalism.” It also goes to the principle of federalism.
“This is their political attempt to hurt Democratic states,” Cuomo stated. “It is totally repugnant and hypocritical of the fundamental conservative ideology which they preach—the limited federal government, respect state rights. This tramples on their own theory. And it is politically motivated. And it was politically targeted. Steven Moore, the conservative economist who advised the Trump campaign, said the Republican tax bill represents death to the Democrats.
“This is not what our Founding Fathers intended. They did not intend for the federal government to manipulate or politically retaliate against states. It’s violative of the fundamental relationship between the federal government and the states. It is un-American, like what the president did with Putin yesterday, like what they did in Puerto Rico, like what they’ve done on immigration, like what they’ve done on trampling women’s rights. It is un-American. Not just repugnant to this state. Repugnant to the Constitution and the values of the American people.”
The 2017 federal tax law, “which resulted from a hyper-partisan and rushed process,” drastically reduced the deduction by capping it at $10,000. An analysis by the New York State Department of Taxation and Finance shows that the cap will increase New Yorkers’ federal taxes by $14.3 billion in 2018 alone, and an additional $121 billion between 2019 and 2025. As set forth in the complaint, the law flies in the face of centuries of precedent, which establishes constitutional limits on the federal government’s ability to use its tax power to interfere with the sovereign authority of the states.
For the entire history of the United States, every federal income tax law protected the sovereign interests of the states by providing a deduction for all or a significant portion of state and local taxes. This uninterrupted history demonstrates that the unprecedented cap on the SALT deduction is unconstitutional, as the lawsuit notes. This new, drastic curtailment of the SALT deduction has both the purpose and effect of harming New York, other similarly situated states, and their residents. Among other things, the new cap will depress home prices, spending, and business sales, and result in slower growth for the New York economy and fewer jobs.
Countering the impression that New York is the highest taxed state in the country, Cuomo said, “The large tax in New York is not state income tax, it’s local taxes – that’s what they are targeting. We have people who pay more in property ax than income tax – if those jump 30% after we capped them with first proper tax cap in history, you will see home values go down, real estate values come down, because it will make this jurisdiction must more expensive, and there may be people right on margin. This is not a theoretical political argument, this is real life.
“Ask your neighbor if property taxes go up 30 percent, what will you do? That’s why we did the property tax cap in first place – 2% year over year – this would be 30 percent bump in property taxes, and if you see real estate values come down, we will have a problem with banks, funding for school districts, and have potential devastating consequences. That’s why wanted to move on expeditious basis.
“This state has been fiscally responsible. That’s undeniable. Our credit rating up, spending increases are at record lows, efficiency up. This is a different point: it’s not for fed government to determine local taxation. That is fundamental Constitutional point.
“We think they are doing it out of political intent. If they want to talk about reduce taxes, give us back the $48 billion they take from us – we are the highest Donor State in the nation. We have been since Moynihan railed against it. We give them $48 billion more than we get back. If you really want us to reduce taxes, give it back and I will reduce taxes.
“They set up two sets of rules,” Governor Cuomo asserted, “One for Republican states, one for Democratic states. If we can’t deduct, state and local taxes [effectively] go up 30 percent. We depend heavily on property taxes to fund local governments.”
The lawsuit, filed today in the U.S. District Court for the Southern District of New York, was led by Attorney General Underwood and joined by the Attorneys General of Connecticut, Maryland, and New Jersey, is against the United States, the IRS and Treasury Secretary Steven T. Mnuchin as defendants.
Cuomo held out the possibility of other states, such as California, joining the suit. “We are forming a coalition, but time is of the essence.”
“New York will not be bullied. This cap is unconstitutional – going well beyond settled limits on federal power to impose an income tax, while deliberately targeting New York and similar states in an attempt to coerce us into changing our fiscal policies and the vital programs they support,” said Attorney General Underwood. “We will not allow partisans in Washington to hurt our people or interfere with our policies. We’ve filed suit against this unconstitutional attack on New York and our state’s fundamental rights — because we won’t stand by and let Washington pick the pockets of New Yorkers.”
“It was a number and a tax selected to effect what they wanted,” Cuomo charged. “You think it was a coincidence that it impacted 12 states, all Democratic, all states Trump lost, all that don’t have Republican representative in Congress? .. That puts democratic states on different footing. That’s why I’ve said this is economic civil war – red versus blue, Democratic versus Republican, and penalizing those states. But these are co-equal sovereigns. The federal government can’t do whatever want. It has a right to tax, and we have right to tax, I can’t interfere with the federal right to tax, and the federal government can’t interfere with our right to tax, and where they drew this line, arbitrary, because it had the desired effect.”
During a press call previewing Donald Trump’s “closing message to the American people” about the glories of the Republican tax plan supported by less than 25% of Americans, Trump’s leading “messagers” – the people charged with making the deal palatable – had to “research” the American Dream, as if they had never heard of the concept before:
“At the president’s direction, we did research into the concept of American Dream,” said Treasury Assistant Secretary for Public Affairs Tony Sayegh. “It is interesting what we found, where the concept came from and what it meant. And part was that in the United States, you were not destined to die in the same income class you were born into, children were not destined to have same quality of life that you had, people had the ability to rise. This was unique thing in world history. Most of the world, most of history, born in a certain class and died in that class, children were born and died in same economic class. America [brought the] idea of economic opportunity for all.”
But now, he said with dubious accuracy because this same criticism has arisen since the Reagan “Revolution”, if he in fact bothered to research, “for first time in American history, parents no longer think their children will be better off. …We will bring back the American spirit, that’s what president likes to talk about it. Consumer confidence is at all time high. That kind of optimism is at the core of the message.”
He asserted, “We’re nearing a historic moment in which we will decide the economic future of the nation. We have the power to reject [the notion] that 2% growth is the new normal and the majority of Americans for first time in history will lose faith that next generation will do better…[We want an] economy that works for all Americans, not just the wealthy and well connected….Ultimately message will be that middle class will no longer just be getting by, finally have the opportunity to get ahead, and that’s what will Make America Great Again.”
When asked about the scores of economists and experts who have challenged the theory that the tax cuts to the wealthiest and corporations will trickle down to working people, that the cumulative impact of the tax plan will hurt working class and middle class Americans, upset the very mechanisms that promote the American Dream (education, health care, home ownership), that it will result in $1.5 trillion added to the national debt which will result in cuts to Medicare, Social Security and Medicaid, and that large majority of Americans oppose the tax plan, White House message strategy director Cliff Sims went on the attack:
”I encourage you to spend a little less time reading [Senate Minority Leader] Chuck Schumer’s talking points, and more time reading the plan [which has yet to be finalized or scored]. This plan offers a lot for the middle class…. [The plan] substantially increased child tax credit, $1000 now to $1600 or $2000; nearly doubles standard deduction so a married couple can take $24,000 tax free and more if they itemize; it lowers the tax rate so more income is taxed at lower rates… Quite frankly anyone who says otherwise is purposefully disingenuous or taking a partisan line that doesn’t meet the reality.”
Sayegh added, “Analysis and studies. The Council of Economic Advisors reported a month ago clearly demonstrates what we are doing on corporate side helps workers, because workers absorb the greatest burden when corporate taxes are high… We know that through analysis, the average worker gets anywhere $4000-$9000.. after policies implemented – because there is a more productive and investment-friendly environment when corporations can compete with significantly lower rate. It is a benefit to hardworking Americans, the American worker.”
Asked where was the analysis that Treasury Secretary Steve Mnuchin said “over 100 people in Treasury are “working around the clock on running scenarios for us,,” Sims said that Treasury “in very rare instances will ever release analysis of a bill that has not already been voted on and passed because as anyone who has followed process understands, there are two bills – House, Senate –there are differences between them and a final bill will be voted on.”
Sayegh also pushed back against polling which shows the vast majority of Americans believe the tax plan substantially favors the wealthy over working people, pointing to rolling back the estate tax and eliminating the AMT (Alternative Minimum Tax), by which Trump in 2005, in the only 2 pages of his tax returns revealed to the public, shows that he would have saved $30 million in tax payments but for the AMT.
“We’ve poured through this from a lot of angles, political strategy and public opinion. It is abundantly clear that almost every poll nationally cited – CBS, Quinnipiac, Marist – is deliberately trying to shake and manipulate public opinion and not accurately reflect it. Quinnipiac uses a methodology where only 20% of respondents are Republican, 33% are Democrats, 38% are independents –a preposterous formula. Negative of 12% between Democrats and Republicans is not close to reality – so does not reflect public opinion.”
Sims added “The more people learn about specifics, the more they love it. 61% to 21% supported it after learning we are doubling the standard deduction from $12 to $24K, 54% support only 14% oppose the child tax credit, 54% support only 18% oppose after being informed of basic provisions. Does anyone on the planet not believe Americans don’t want lower taxes, a fairer corporate tax rate that will create more jobs and higher wages? When polls get into specifics…support goes through the roof. When you have polls that try to manipulate, push questions, you get numbers you can put in Chiron or story to manipulate public opinion, but not reflect what Americans feel.”
Except that polling only specific, popular provisions (who doesn’t want higher standard deduction), does not put the whole picture into view: the higher premiums likely to come when the individual mandate for the Affordable Care Act is eliminated; the personhood provision; drilling in the Arctic National Refuge; taxing graduate school fellowships as income; eliminating the deductibility of state and local taxes and significantly limiting the mortgage interest deduction, and adding more than $1 trillion to the national debt, which will trigger cuts to Medicare, Medicaid and Social Security, curtail investment and infrastructure spending.
And no one has asked where the $300 billion to pay for disaster relief just from the 2017 climate catastrophes will come from, or why the Republicans have refused to reauthorize CHIP, which provides access to health care for 9 million children and pregnant mothers.
“Then we will have done tax cuts, the biggest in history; healthcare, phenomenal healthcare. I know you don’t want this — welfare reform. Does anybody want welfare reform?(Applause.)And infrastructure. But welfare reform — I see it and I’ve talked to people. I know people, they work three jobs and they live next to somebody who doesn’t work at all. And the person who’s not working at all and has no intention of working at all is making more money and doing better than the person that’s working his and her ass off. And it’s not going to happen. Not going to happen. (Applause.) So we’re going to go into welfare reform…”
Governors of New York and California and the Governor-Elect of New Jersey and California joined forces to condemn the Republican tax plan as a “stake in the heart” of the nation’s economic engine, a cynical ploy to punish Democratic-majority states, and only the first-step toward generating such an increase in the national debt to justify cuts in Medicare, Social Security, Medicaid, CHIP and other social programs, and threatened to challenge the legality of elements of the tax plan should it become law.
In a joint press call, New York Governor Andrew Cuomo, California Governor Jerry Brown and New Jersey Governor-Elect Phil Murphy and using phrases such as “evil,” “nefarious” and “cynical,” raised issues of the legality of elements of the Republican tax plan, which shifts $1.5 trillion in wealth from middle class and working families to the wealthy – indeed, 50% of the tax cuts go directly into the pocket of the top 1% – through lowered tax rates, elimination of the AMT (Alternative Minimum Tax), reductions if not elimination in the Estate Tax (which only impacts 2 out of 1000 families now), and new rules enabling the wealthiest to shelter tax through pass-throughs.
But the Republicans pay for the cuts by largely eliminating or significantly reducing the deductibility of state and local taxes, including property taxes, effectively double-taxing, something that has not existed since income taxes were first implemented in 1913, which disproportionately targets 12 states that happen to vote Democratic and also happen to be the donor states that account for 40% of the nation’s gross domestic product (GDP). A similar effort during the 1986 Reagan tax reform effort was defeated by both Republicans and Democrats. The governors say this may be challenged as unconstitutional double-taxation.
Other provisions, such as establishing a legal framework for “personhood” may also be challenged as unconstitutional.
The way the Republican tax plan is structured, it shifts wealth from the 12 “donor” (Democratic-majority) states, to the rest of the country, by eliminating or dramatically reducing the tax deductibility of state and local taxes, including property taxes. In effect, it makes those states structurally uncompetitive by effectively increasing taxes by 20-25 percent for homeowners, may reduce home values by that amount, as well as make it difficult for schools (which account for 60-65% of New Yorkers’ property taxes and 40% of California’s) to raise the revenue they need to property function. But while individuals lose the deductibility of SALT, corporations do not.
In a further blow to public education and stripping away of the separation of Church & State, the Republicans would allow the tax-exempt 529 funds, created to fund college, to be used for K-12 education for parochial and private schools, even homeschooling. (This is on top of repealing the Johnson Amendment, opening floodgates of “charitable” contributions to religious institutions to become political PACs; a particularly insidious breach of the Constitution’s Establishment clause because the religious leader preaching from the pulpit has a special ability to coerce.
The governors held at the hope that the wildly unpopular Congress (only 13% approval) and the most unpopular president in history (33% approval), will recognize the tax plan is similarly wildly unpopular, with barely 20% support, and that Republican Congressmen who have to stand for election in 2018, will do what is best for their constituents.
The Senate version, which eliminates the individual mandate from the Affordable Care Act (Obamacare), would result in 13 million more people without health insurance by 2025, and 10 percent annual increases in premiums on everyone else.
The bill also “pays” for the tax cuts to the richest Americans and corporations by eliminating the deductibility of student loan interest, tax credits for renewable energy, and opens the way for drilling in the Arctic National Refuge, and other provisions which help the upward mobility of working families and middle class striving to achieve the American Dream.
The governors held out a glimmer of hope that enough of the Republicans (the only ones who voted in favor of the tax plan) would vote for their constituents’ interests.
“The tax plan that passed Senate, the House, and is headed to reconciliation, is a long way from done. It is a fraud on the American people. They talk about tax cuts for middle class and working people, but what it is, is tax cut for the rich – 50% of the tax cuts go to the top 1%. That’s an inarguable fact. Their theory isn’t new or novel. It’s ‘trickle down’ on steroids.” He argued that instead of corporations taking their tax cuts to raise wages for workers or create more jobs through investment, corporations in the past have pocketed the extra cash or used it to buy back stock (raising the share prices) or paying dividends.
“To add insult to injury,” Cuomo said. “the tax cut is then targeted at 12 states that happen to be Blue States where they target eliminating state and local deductions. People don’t understand what that will do, but it will be devastating for states. In essence, it is an increase in property taxes and state income tax only on those 12 states. It puts us at a structurally competitive disadvantage because structurally our taxes will be higher.” That gives residents additional complaint about their government (Republicans even now charge that New York’s taxes are high because of mismanagement, or lavish spending on services). Cuomo countered the claim by Republicans that the poorer states somehow subsidize the public services of the richer states. New York, California and New Jersey are donor states, which means we put more into the [federal] till than we take out. This aggravates and enhances the injustice where we are subsidizing the other states, and now you’re using New York and New Jersey as a piggybank to finance tax cuts in other states.
“That amounts to political retaliation through the tax code. That’s why they passed it with only their own votes,” Cuomo charged.
California Governor Jerry Brown assailed the Republican tax plan saying, “the most immediate evil of this cynical maneuver called the tax bill is to further divide America when we are at one of our most divisive periods in history. The idea that a president and representatives only in the majority would use that power to penalize 12 states – most of which voted strongly against this president– is not going to bring country together. We are divided while some of our most important competitors are getting more unified, authoritarian. We need to come together. This will further divide blue states from red, Democrats from Republicans. It is evil in the extreme. It exacerbates inequality….It’s not right. It won’t stand.”
New Jersey Governor-Elect Philip Murphy further expounded on the devastating impact in terms of widening inequality and continuing down the awful path of us vs Washington leadership.
“It is based on the trickle down theory, which we have seen time and again doesn’t work. Executives get paid better, the gap between the top of corporate food chain and bottom widens; shareholders benefit from buybacks while working people are neglected. It is a scam at the ultimate extreme. On more than one occasion we all heard, when asked for the rationale, the awful answer [from Republicans] was ‘it is our donors, our donor base will dry up if we don’t.’ We saw the chaos Friday night, literally lobbyists hand-writing in pen, amending the bill. This is as bad as it gets.
“But in a ‘glass half full’ sense, as Governor Cuomo stated, It’s not over yet. This is the ninth inning. Each of our states have Republican House members. This is beyond Republican, Democrat; it is a clear question of whether you are representing the constituents who elected you. Black & white.”
“The changes in the SALT deduction, are particularly problematic, Murphy said. “That’s been part of the tax code since income tax became legal in 1913. For over 100 years, Congress realized taxing people twice is unfair. We are the biggest odnor states in terms of the federal money we give. This will only make it worse.
“The stronger we are together, the more numbers, the more locked arms, we fight together as a team. There is a lot to be said for that. I am honored to be with you.”
Asked what actions, beyond political pressure on Republican members of Congress, the governors might take, they said that just as the Republicans, the day after Obamacare was signed into law, pledged to repeal and replace, they would also take whatever means – even court challenges– to repeal and replace this tax law.
“We’re looking at the legality now. [SALT deductions] has been in the tax code since it started over 100 years ago. This is double taxation – they are taxing taxes, this from the party that’s against taxation, redistribution [or what Republicans used to condemn as “class warfare”]. This is redistribution in an exponential form –taking from richer states and subsidizing a tax cut in less wealthy states. Hypocritical. Everything they said were against: double-taxation, taxing tax for first time, redistribution state to state, so may well be illegal, unconstitutional. We’re looking at it.”
“There may be some legal action but this is a quintessentially political challenge,” Governor Brown stated. “Our job is to communicate the fraudulent and nefarious character of this tax bill – the way it proceeded, which John McCain said follows no normal pathway. We want to make sure our members of Congress know they are hurting New York, California, New Jersey but also hurting America. We are the key elements of America’s engine of prosperity, and when Trump and his allies attack New York, New Jersey, California, they are attacking the vital seams of the American economy. That’s stupid. They will regret it, and we will do everything we can to convince our Republican representatives that the right thing to do is defeat.
Murphy said they are working with state Attorneys General “to tear up all the floor boards, to the fullest extent of law, and challenge this. There are 500 pages of amendments, a lot handwritten. I am betting there are flaws, holes. If we don’t succeed in the next few days, we will have to take this to the limit.
“This is double taxation and I’m not sure it’s legal,” said Cuomo. “We will find out if it is. But Governor Brown’s point is that it is counterproductive. These 12 states are 40% of GDP. If you say this will help the American economy, how do you do that by assaulting 12 states that are 40% of GDP: this will be negative for our states and regional economies. No doubt about that.”
“Attacking the innovation of NY, CA, NJ and others is just a dumb move, only explained by the desperate situation the Republican leadership find themselves,” Governor Brown added. “This president is the most unpopular is history. They are riding a dead horse in this tax bill, acting irrationally, not in interest of country, throwing a wrench into engine of economy.”
“The more people understand, the more people understand how unfair, divisive and harmful it is to them individually,” Cuomo commented. “The problem is, there is so much news, so much happening. This is so complicated – elimination of state and local taxes but the more people understand it, the more they are against it. Congresspeople and Senators ultimately have to go home, and if they vote for this, they are voting against the interests of their constituents, and they have election next year. Ultimately democracy works. A congressperson who votes for this, there’s no going home again.
“I’m an optimist for the simple reason that we all believe in a different America than this bill articulates,” Murphy said. “The more people understand what’s in this thing, the more actively they push back. What it will do for higher education by repealing tax deduction for student loans, stripping credits for renewable energy, opening Arctic to drilling, on and on –repealing the individual mandate in ACA – the more people realize what’s at stake, the more collectively they say this can’t go forward.
Largely eliminating the SALT deductions, Cuomo said, contradicts the Republican claim their tax plan is supposed to spur the economy. “But targeting 40% of GDP, then saying that’s how you are going to spur economy, by putting arrow into economic heart of these 12 states? There are predictions it will drop the value of homes in our states because property taxes in effect will go up 20-25% over night. If you drop the value of homes, disrupt the whole financial system. Mortgage foreclosures. I don’t think they understand what they are doing.
“We talk about [eliminating SALT deductions] as if it were a new concept,” Governor Cuomo said. “It’s not new. They proposed eliminating SALT during Reagan’s time. At that time, Democrats and Republicans both said it was wrong and defeated it. The difference now is the political extremism and their willingness to divide, and the political extremes they will go to.
“This is only step one of their plan – we know what their plan is, because not new, we’ve seen the playbook. Step one is tax cuts for the rich. Step 2, is to drive up the debt, the deficit, and then come back and say we have $1.5 trillion debt that we created (by cutting taxes for rich), and now we have this debt, we have to address it by cutting government spending. Where will they go? The right to Medicaid, healthcare for poor people. The right to CHIP for poor children, Right to housing programs, food stamps, etc. That’s inevitable. They are creating the debt that will then justify their philosophical step to cut government spending to hurt the poorest Americans.”
“Look at this in its entirety, beyond SALT,” Murphy added. “This is their way to cut Medicaid, Medicare, Social Security. It is the height of hypocrisy from the so-called deficit hawks. Look at higher education and student loans, Obamacare individual mandate, Seen result of trickle down. Pass through. Taken in its entirety, the Republican tax plan is exceedingly damaging not just to our states, but entire country.”
“Republicans saw Obamacare passed and the next day they started Repeal & Replace,” Cuomo said. “If they do this, the next day, we will start the repeal and replace of the divisive Tax Act.”
None of them mentioned, but should have, the increasing pressures on the federal government for disaster relief from climate catastrophes (hundreds of billions of dollars in 2017 alone), the need to address the opioid crisis, and to rebuild and mitigate infrastructure.
The Republican tax plan (scam) – whether the House or the Senate version or whatever will come out of conference – would be devastating to New Yorkers in particular, but the nation as a whole. More than 50 percent of American households will wind up paying more in taxes, with the various cuts in deductions for all the things that enable upward mobility – home mortgage, local property taxes, education loans, medical costs.
Instead of simplifying the tax code and eliminating loopholes, the Republicans have only cut taxes for the wealthiest and corporations without eliminating the loopholes that enable profitable multi-nationals like Apple shelter profits from US tax. There is no incentive for corporations or wealthy individuals to invest in the US, or to create jobs, or even to raise wages. Instead, the Republicans would cause the biggest transfer of wealth from the poorest and middle class to the wealthiest, at the same time, creating a new American aristocracy of wealth and political power. It would intensify the already growing gap between rich and poor – the greatest gap since the Gilded Age and the Robber Barons – hollow out the middle class. Meanwhile, the poor and middle class would be living with heightened insecurity because of loss of access to affordable health care.
The nonpartisan Congressional Budget Office released its report which clearly shows that the federal government would be raising taxes on those making less and generously benefiting those making more. For instance, Americans making less than $30,000 in 2019 will pay $2,580,000,000 more in taxes – while those making over $200,000 will pay $118,550,000,000 less in taxes in 2019.
“The Republican tax plan [which eliminates the deductions for state and local taxes] would be devastating for Long Island,” Congressman Tom Suozzi, Democrat of Long Island told a Town Hall attended by 150 people in Great Neck. “The current tax bill passed by the House and proposed by the Senate would be bad for the country but especially bad for New York State and Long Island. Devastating…. It will cause people to move out – make people move away – not just the billionaires and millionaires making oodles of money, but people who are just making it.”
Housing values will likely fall because the tax deduction of the mortgages – $1.5 million is average home cost for New York City – will be eliminated. Houses will be even less affordable.
The Republican tax plan is “structured in a way to take money out of the middle class to pay for tax cuts for the very wealthy and corporations. They had to find revenue to pay for tax cuts – they couldn’t go over $1.5 trillion deficit over 10 years in order to pass the bill with only 51 votes in the Senate.” They came up with the biggest reduction in deductions – eliminating the deductions for SALT (state and local taxes), which if they put back in, can’t give the tax cuts to corporations.” It is even questionable if it is constitutional, since it would essentially double-tax that income – first at the state and local level and then again at the federal level.
“It’s a conscious decision that affects states like New York, New Jersey, California, and a few others” – states with high state and local taxes which also are “donor states” sending far more to the federal government than comes back in federal aid., which also happen to be “blue” states. It’s also part of the strategy to “shrink the federal government” and attack the social safety net put into place since FDR’s New Deal that came out of the Great Depression and continued by LBJ’s Great Society: Medicare, Social Security and Medicaid because budget deficits will trigger mandatory reductions in spending – $25 billion worth in 2018 alone.
“This is the issue we have to shut down the government on,” said a town hall participant, Howard Weitzman who was a village mayor and member of the Nassau County Board of Assessors. “They cannot destroy the economic engine of this country – all this tax money going to government. They are willing to destroy this area to give tax cuts to people who don’t need them. [Budget Director Mike Mulvaney charged, “Why do people in Alabama have to support New York” but the opposite is true: he knows very well that New York sends $48 billion more to the federal government, which go to states like Alabama. “Shut down the government.”
Democrats would be right to shut down the government. And the Donor States like New York, California, New Jersey (not coincidentally which are Democratic), should withhold the excess revenue to the federal government, much like a tenant-landlord dispute, putting the money into escrow for use to accomplish the infrastructure projects and transition to clean-energy economy that would have been federally funded. (See: Republican Tax Plan is Attack on Blue States; Fight Back by Holding Money ‘in Escrow’)
Trump and the Republicans intend to bankrupt the nation, to justify $25 billion in cuts to Medicare, Social Security and Medicaid next year, and billions more thereafter. Their tax policy would saddle the nation with $1.5 trillion more in debt while doing nothing to pay down the $20 trillion in debt we already incur – that interest payment alone, unless Trump defaults as he has on his own debt, will amount to 5% of the annual budget, more than $200 billion worth each year.
The Republican tax plan would raise taxes on the 59 million households that make $50,000 or less; and by 2027 the 86 million households who make less than $75,000. Trump appealed to the suffering masses whose salaries haven’t kept up in the 40 years since the Reagan “revolution” – but as Suozzi said, “the world is dramatically changed because of globalization and technology. We need to figure out how to get more companies to locate in US and create jobs where people make a decent living –enough to buy a house, educate their children, have health insurance and retire without being scared.” But the Republican plan will “starve the beast” and break the “engine” of economic growth by cutting off revenue that would pay for education, infrastructure and health care, while increasing the national debt which will raise interest rates. It is a cycle of destruction.
NYS Governor Andrew Cuomo Reacts
Here’s New York State Governor Andrew Cuomo’s response to Senate Budget Committee’s 12-11 vote strictly along partisan lines:
“The President and Republican members of Congress appear determined to pass a tax plan before the end of the year because after an otherwise entirely fruitless legislative year, they are in desperate need of an accomplishment. They must believe in the old adage that “doing something is better than doing nothing.” In this case, that could not be less applicable.
“The GOP tax plan is not just a marketing fraud. It is a schizophrenic hybrid of extreme conservative political ideology and crass electoral politics. The House and Senate have different plans, but both have the same DNA. Both plans pretend to offer tax relief to the middle class, but in reality the policy they advance is just old, discredited trickle-down economics on steroids: disproportionate and large cuts for the rich and the big corporations that are then supposed to result in economic growth that is magically passed on to the workers as wage increases. This is a purely ideological concept that lacks data to support either the idea that the economy will be stimulated or that higher wages will result.
“Both the Senate and House plans are financed in large part by the particularly obnoxious, and possibly illegal, elimination of deductions of state and local taxes (referred to as the SALT deduction). The GOP plan eliminates the deductibility of state and local taxes which is a direct attack on the states with higher state and local taxes. New York and California top the list of the twelve states that will most directly face hardship if SALT deductions are removed. Curiously, all twelve are “blue” states and if this change to accepted tax law passes, these states will be at a competitive disadvantage to other states with lower local taxes.
“The deductibility of state and local taxes has been a sacrosanct principle of tax law for the past one hundred years. It is the underpinning of the economic system for state and local governments. Republican ideology that has always espoused “state’s rights” now tramples on that theory with the elimination of this provision. And anti-tax conservatives are now proposing the first ever double taxation – to tax the taxes an individual pays locally. There is a serious legal question as to whether this double tax is constitutional.
“The elimination of the SALT deduction is the ultimate redistribution of wealth making conservatives who vehemently oppose this philosophical concept all the more hypocritical and disingenuous as they now support it. Eliminating the SALT deduction will redistribute wealth from richer states to poorer states. New York and California will effectively serve as piggy banks to finance tax cuts for other states. Our loss is their gain.
“In New York, six of nine Republican Congress members opposed this plan. The three who stood in support, voted in opposition to the interests of their constituents out of sheer party loyalty. Their justification for supporting this plan is flawed factually and ideologically. If New York raises taxes on the rich and corporations, people and business will leave the state for lower tax states and the remaining tax burden will fall to those left behind. The deduction of state and local taxes is not a federal subsidy for New York.
“New York State is the number one donor state in the nation, sending $48 billion dollars more to Washington than we get back. Eliminating SALT will compound the Federal taking adding approximately $18 billion to the $48 billion now taken. If the Republican Congress returns the $48 billion that New York sends to Washington, then I would be open to discussing eliminating the SALT deduction.
“And to make matters worse, the Senate GOP version proposes to repeal the Affordable Care Act, another legislative promise that the GOP controlled Congress has failed to achieve. It is just healthcare policy masquerading as tax reform. The reality is that lower income Americans won’t have access to health insurance and the individual tax cuts that are set to expire in 2027 will result in half of American households paying higher taxes than they would have if the Senate bill had never passed.
“The Republican Congress is correct that the American people expect action from their government. But in their attempt to save legislative face, they should heed the old adage: “do no harm.” It’s true in medicine and politics. This tax reform plan hurts the country’s poor, working and middle-class families and will have a devastatingly negative economic impact on the twelve states targeted by Washington.
“To be this reckless and dismissive of the economic interests of so many Americans, the Republican’s political assumption must be that they have lost the “blue” states anyway. That is no way to govern or – dare I say – to prepare for mid-term elections.”
Governor Andrew M. Cuomo today issued a letter to President Donald J. Trump condemning the federal tax plan to eliminate or roll back state and local tax deductibility and calling on the President not to use New York as a piggybank for other states.
Here is text of the letter:
Dear President Trump,
I write to you on an issue that impacts every single American: pending federal tax legislation. I am not writing as a Democratic Governor to a Republican President, but rather as one New Yorker who cares about New York and the country to another. I often say to the New York State legislature, “we are Democrats and we are Republicans, but we are New Yorkers first.”
As you well know, the House is expected to release additional details of a “tax cut” plan this week that in reality amounts to a “tax increase” plan for states like New York. The current proposal primarily uses New York and California as the piggybank to make it possible to cut taxes for other states. By eliminating or rolling back state and local tax deductibility, Washington is sending a death blow to New York’s middle class families and our economy.
I understand the politics at play here. California and New York are “blue states.” I also understand that the political map dictates that most Republican members of Congress come from outside the Northeast and West Coast and their primary motivation is to help their states at any cost, even when it comes at the cost of middle class New Yorkers. But when the economies of New York and California suffer, and they will, the nation follows.
It’s clear this is a hostile political act aimed at the economic heart of New York with no basis on the merits. First, it is an illegal and unconstitutional double taxation that forces our middle class families to subsidize a tax cut for the rest of the nation, and it is contrary to every principle the Republican Party has always espoused. Second, it reverses all the bipartisan progress New York State has made in lowering taxes over these past few years. While we have lowered state income taxes, capped property taxes and are forcing local governments to consider shared services, this federal act would erase all those gains and in fact increase taxes. Eliminating state and local deductibility will result in a tax increase of $5,660 on average for one in three taxpayers in New York, or 3.3 million New Yorkers.
This backward tax plan has encountered much deserved resistance, including from Republicans in the Senate. Senate Finance Chairman Orrin Hatch said “I don’t think that’s going to go anywhere,” adding that state and local tax deductibility is “a system that’s worked very well.” In the face of this pushback, Republican leadership is now trying to salvage their tax plan with a so-called “compromise.” Their scheme is to allow a property tax deduction, but do away with the deduction for state income taxes. For middle class New York families, the average tax increase attributable to losing that deduction would be $1,715. And considering the original federal proposal would cost New York State taxpayers $18.6 billion, this “compromise” does little to help our state since it would still cost New York State taxpayers nearly $15 billion.
Another “compromise” that is being suggested, where only higher income individuals would lose the state and local deductibility, is a 3-card Monte game that could be played on 42nd Street in Manhattan. New Yorkers are not stupid. We know that if deductibility is eliminated on higher incomes it will have a ripple effect, forcing these New Yorkers to move out of the state, taking their tax revenue with them, thus increasing taxes on everyone else. New York will not be in a position to cut state taxes because both the original proposal, as well as the proposed compromise, will force the highest taxpayers from the state and deplete our revenue stream. As you know, five percent of New York State taxpayers account for nearly two thirds of our annual income tax revenue.
I understand why Paul Ryan would seek to hurt New York, but to ask New York Republican members of Congress to vote to raise taxes on their constituents is a betrayal against their state and their constituents. In fact, seven of nine Republicans from New York are against it. The two representatives who support it—Congressmen Collins and Reed—are the Benedict Arnolds of their time because they are putting their own political benefit above the best interests of their constituents.
Speaker Ryan’s only justification is that other states subsidize New York. He is just wrong. They don’t. The opposite is true. New York subsidizes every other state in the nation. We are the highest donor state which means we send $48 billion more in tax dollars to the federal government than we receive back in federal spending.
To be fair, this is not a new idea to pillage New York and California and send their wealth to other states. Congress tried it under President Reagan, but the gross injustice of it caused all but the most partisan and callous officials to drop support. Today’s proposals are no different. Our Congressional representatives should be saying it’s time New Yorkers get their money back. Instead, the current proposal would be taking even more revenue from the number one donor state. How unfair.
There is no middle ground here. Any of the proposed “compromises” will still destroy New York’s economy and harm the middle class. There can be no elimination, no “compromise,” and no cap on state and local tax deductibility.
New York needs your help. You can stop this. And you should not just as an American, but as a New Yorker.
Hurricane Harvey had just devastated Texas, the worst natural disaster up until two weeks later when the entire state of Florida was about to be destroyed by Hurricane Irma, as whole Caribbean island nations as well as the US territory of Puerto Rico had their infrastructure utterly decimated. And Hurricane Jose was on Irma’s tail. Meanwhile, Los Angeles and Oregon were being consumed by record wildfires. Congress had authorized $15 billion toward Hurricane Harvey relief and to replenish the nearly depleted funds of FEMA.
Indeed, in North Dakota on September 6, as Hurricane Irma was barreling toward Florida, Trump, the Tax-Cheat-in-Chief, gave an incoherent speech touting his tax plan that began with his incredulity in discovering that North Dakota was undergoing a massive drought.
“I just said to the governor, I didn’t know you had droughts this far north. Guess what? You have them. But we’re working hard on it and it’ll disappear. It will all go away,” Trump said.
Accuweather is projecting the cost of Harvey and Irma alone at $290 billion, or 1.5% of total GDP, which would erase the growth of the economy through year-end, according to Dr. Joel N. Myers, president and chairman.
That’s also more than one-fourth of the $1 trillion that Trump proposed for a 10-year infrastructure plan. Where will the money come from? And if all infrastructure spending has to be directed to Texas and Florida, where does that leave the rest of the country? Not to mention the $1 billion Trump is demanding as down payment on a $70 billion border wall.
Does this get you thinking that Trump and his administration, especially EPA Administrator and shill for the oil industry Scott Pruitt, should rethink their self-serving notion of climate change denial (self-serving because it is used to fuel their argument that they can overturn environmental regulations on the massively profitable fossil fuel industry)? Of course not.
But it should also cause them to rethink their totally corrupt plan for tax reform which is intended to starve the federal government of funds, balloon the budget deficit and national debt, all to shift more of wealth to the already fabulously wealthy. Especially when so many people have lost their businesses and jobs, which will certainly impact tax revenues.
Let’s just consider for a moment what taxes are supposed to be for. And yes, a considerable amount goes to pay for interest on bonds, but bonds are what are used to pay for infrastructure – they represent an investment in the future. And as we are considering how to replace the destroyed and decimated infrastructure, why not build back with sustainability in mind.
Just as in his speech declaring his decision to withdraw the US from the Paris Climate Agreement (forged with US leadership and signed by 195 countries), Trump, who took a $900 million tax deduction on his failed Atlantic City casino and probably has never paid 40% tax in his life,lies to rationalize his tax plan, beginning with the lie that the US is the highest taxed nation in the world (not true) and that workers wages will increase if only shareholders and CEOs and the wealthiest 1% could keep an even greater percentage of their money (history shows the opposite). (See New York Times, The False Promises in President Trump’s Tax Plan)
Remember: the wealthiest people used to be taxed at 90% – that was after World War II when the nation had to rebuild its treasury. We were able to afford the GI Bill which probably did more to create a middle class than anything since the New Deal. Now the wealthiest pay something between 35 to 40% – except that they don’t.
Trump (and Ryan) want to give a $170,000 annual windfall to the wealthiest Americans, while crumbs ($700) to the middle class who will lose the only tax deductions they can use. $170,000 times four years worth mean in terms of free money (from tax-paying schnooks) is a lot of dough to invest in politicians and policy with a spectacular return: policies like enabling Big Pharma Sharks to hike up life-saving drugs by 5000%; Oil Barons to make sure incentives for wind and solar energy don’t help these industries develop into competitors; real estate developers who can delight in the tax advantages that let them take a $900 million deduction and build without interfering regulations on lands that are needed to soak up flood waters and health insurance companies to raise premiums to pad profits.
Now this nation is looking at more than $290 billion just to recover from the climate disasters which are becoming more and more frequent, hitting the high density developed urban centers.
If taxes for those who have the means to pay don’t cover the cost, who does? Ryan and the Republicans love to talk about “sacrifice” but the only ones they demand sacrifices from are not the wealthiest or the corporations, but Social Security and Medicare recipients, struggling middle class kids who need to take out loans to pay for college. Their concept is to take money out of the consumer economy, which starts a downward unvirtuous cycle of economic contraction. How do we know?” Because we have seen this movie before: the Bush tax cuts. Meanwhile, median income has risen to its highest levels in 1999 (under Bill Clinton) and 2016 (under Barack Obama) and their tax-and-spending plans.
The Trump/Ryan tax “plan” requires a federal budget that slashes spending for infrastructure, for research and development, for education, for environmental protection (and of course, eradicating any mention of climate change), even slashing spending for diplomacy and foreign aid. It depends on slashing Medicaid and subsidies to keep health insurance affordable (that’s why they are so desperate to repeal Obamacare).
It slashes the tax rate for corporations which already do not pay the nominal 35% rate. Many highly profitable corporations – including General Electric, Pepco Holdings, PG&E Corp., Priceline and Duke Energy – paid nothing into federal coffers from 2008-2015 yet benefit from all the services the government provides including roads, public safety, an educated workforce, mass transit, a military to defend their shipping.
To get to a tax cut without obscenely increasing the national debt, the Republicans say they will get rid of “loopholes” like the mortgage credit and property taxes – that would only complete the decimation of the Middle Class and destroy any semblance of an American Dream. What would make more sense, if they really cared to “reform” the tax code and stop the income distribution from middle class to the already fabulous rich, is to take away the mortgage tax credits on 2nd, 3rd homes and such, and take away the many special deductions that real estate developers like Trump has benefited from, as well as the loopholes that let hedge fund managers shield all but a fraction of their income from taxes that wage-earners pay.
Indeed, the policies that Trump are proposing – specifically, eliminating the tax deduction for state and local property taxes – would hurt blue-states that tend to have higher state and local taxes because they tend to have higher property taxes but provide more services and get less in federal payments than they send to the government, while red-states that have low state and local taxes (and crappy schools and health care) get more from the federal government (paid for by blue states) than they send.
And what about Puerto Rico. which already was in economic disaster – having defaulted on $70 billion in debt – and basically written off by the US government. It’s infrastructure is now totally destroyed. How will it be rebuilt? Here’s what I imagine: Trump is so transactional, I can see a foreign country (China?) with big bucks and an interest in having a foothold in the Western Hemisphere buying Puerto Rico from the US. After all, what is $100 billion or $200 billion to put the island right?
Of course Trump’s tax “reform” plan – sketched out as if on the back of an envelope without any analysis – is really all about tax cuts to the wealthiest and to corporations. As Hillary Clinton said during a debate (which she won): “trickle down economics on steroids” from the guy who took a $900 million deduction for a failed real estate deal, which taxpayers – normal working stiffs – wind up paying for.
Those who have actually analyzed the plan have said that the wealthiest people – who have done astronomically well for decades, while middle class Americans have scarcely had a salary increase in 40 years, so that the gap between rich and poor has reached Grand Canyon proportions – would get a tax windfall of $170,000 a year, while middle class families would get something like $700. Where do the 1 percenters put that extra money which they scarcely need? Well, they invest in buying politicians and influencing policy, of course.
Tax “reform” figures into the Trump obsession with repealing Obamacare and leaving 32 million people without health insurance. It figures into the administration’s dismissal of the Gateway Tunnel project so important to the New York region’s infrastructure and economy.
But now, Trump’s Republican states are being whacked with climate catastrophes, and the money has to come from somewhere.
And let’s also be reminded that the growth in the economy – first, saving the nation from plunging into another Great Depression, and now rebounding to the highest median income, lowest unemployment rate ever and highest rate of health insurance coverage while reducing the poverty rate – happened because of Obama Administration policies and would have been even more effective in terms of raising wages and living standards if the Trump Administration did not steamroll back policies, like overtime pay, parental leave, and federal minimum wage and obstruct infrastructure development and the transition to clean, renewable energy.
People remark that the devastation in their neighborhoods from these massive climate disasters is like a bomb went off. Well, in wartime, taxes are raised – that’s how the rate on the wealthiest hit 90%, to pay off the World War II debt. This is wartime. This nation has to rebuild, and sustainably, responsibly. We need to invest in 21st and 22nd century technologies, to keep the United States a global leader. Otherwise, we will cede our leverage to China which has basically embraced the American model of spreading its political ideology (nominally, “Democracy”) through capitalism (nominally “free market” as opposed to centralized control) and is literally buying up influence over Africa and Asia.
Of course, Trump’s tax plan is Paul Ryan’s tax plan (Trump never actually had a plan), and the Republicans are content to let Trump destroy the nation and end the social safety net including Medicare, Social Security and Medicaid, and possibly embroil us in World War III, until they can get jam through the tax plan they have coveted since Reagan.
Donald Trump is racing to the 100-day mark to do as much as he can to undo progress won over the past century, particularly eradicating every part of Barack Obama’s legacy.
On Wednesday, he signed Executive Orders weakening the Antiquities Act that has been used since Theodore Roosevelt to protect federal land for the American people.
He signed another Executive Order aimed at rolling back national education standards put into place, originally, by George W. Bush under the No Child Left Behind Act, amended with Barack Obama’s Race to the Top (which used federal financial incentives instead of threats of losing federal aid), and reformed under ESSA (Every Student Succeeds Act).
Also, his Treasury Secretary introduced the outline for tax “reform” which cuts taxes for the wealthiest and corporations and promises to blow a hold trillions of dollars wide in the national debt, just as previous “voodoo” “trickle-down” tax “reform” by Ronald Reagan and George W. Bush have done.
According to the pool report by Dave Boyer, White House correspondent for The Washington Times:
The president signed an executive order at the Interior Dept. with Vice President Pence, Interior Secretary Ryan Zinke and several lawmakers and governors. The order directs Interior to review larger national monuments created since 1996.
Trump said the Antiquities Act “does not give the federal government unlimited power to lock up” millions of acres of land and water. He especially criticized the Obama administration for an “egregious use of power” and an “abuse of the monuments designation,” and said that it’s time “to end another egregious abuse of federal power.”
“It’s gotten worse and worse and worse. This should never have happened,” he said. “Now we’re going to free it up.”
“We’re returning power back to the people,” Mr. Trump said. “Today we’re putting the states back in charge.”
Pence called the use of the monuments designation “one of the great federal overreaches in recent decades.”
Mr. Zinke said “somewhere along the line, the act has become a tool of political advocacy.” He said the order “does not remove any monuments” or weaken any environmental protections.
[However, it is clear that the powers that Trump is taking upon himself is aimed at reversing Obama’s designation of Bears Ears in Utah.)
Here’s more of what Trump said:
“In the first 100 days, we have taken historic action to eliminate wasteful regulations. They’re being eliminated like nobody has ever seen before. There has never been anything like it. Sometimes I look at some of the things I’m signing I say maybe people won’t like it, but I’m doing the right thing. And no regular politician is going do it. (Laughter.) I don’t know if you folks would do — I will tell you literally some politicians have said, you’re doing the right thing. I don’t know if I would have had the courage to do some of these things. But we’re doing them because it’s the right thing to do. And it’s for the good of the nation.
“We’re returning power back to the people. We’ve eliminated job-destroying regulations on farmers, ranchers, and coal miners, on autoworkers, and so many other American workers and businesses.
“Today, I am signing a new executive order to end another egregious abuse of federal power, and to give that power back to the states and to the people, where it belongs.
“The previous administration used a 100-year-old law known as the Antiquities Act to unilaterally put millions of acres of land and water under strict federal control — have you heard about that? — eliminating the ability of the people who actually live in those states to decide how best to use that land.
“Today, we are putting the states back in charge. It’s a big thing.
“I am pleased to be joined by so many members of Congress and governors who have been waiting for this moment, including Governor Herbert of Utah. Thank you, thank you, Governor. Governor LePage of Maine, who, by the way, has lost a lot of weight. (Laughter.) I knew him when he was heavy, and now I know him when he’s thin, and I like him both ways, okay? (Laughter.) Done a great job. Governor Calvo of Guam. Thank you. Governor Torres from the Northern Mariana Islands. Thank you, thank you, Governor.
“I also want to recognize Senator Orrin Hatch, who — believe me, he’s tough. He would call me and call me and say, you got to do this. Is that right, Orrin?”
SENATOR HATCH: That’s right.
THE PRESIDENT: You didn’t stop. He doesn’t give up. And he’s shocked that I’m doing it, but I’m doing it because it’s the right thing to do. But I really have to point you out, you didn’t stop.
“And, Mike, the same thing. So many people feel — Mike Lee — so many people feel so strongly about this, and so I appreciate your support and your prodding, and your never-ending prodding, I should say, because we’re now getting something done that many people thought would never ever get done, and I’m very proud to be doing it in honor of you guys, okay? Thank you. (Applause.)
“Altogether, the previous administration bypassed the states to place over 265 million acres — that’s a lot of land, million acres. Think of it — 265 million acres of land and water under federal control through the abuse of the monuments designation. That’s larger than the entire state of Texas.
“In December of last year alone, the federal government asserted this power over 1.35 million acres of land in Utah, known as Bears Ears — I’ve heard a lot about Bears Ears, and I hear it’s beautiful — over the profound objections of the citizens of Utah. The Antiquities Act does not give the federal government unlimited power to lock up millions of acres of land and water, and it’s time we ended this abusive practice.
“I’ve spoken with many state and local leaders — a number of them here today — who care very much about preserving our land, and who are gravely concerned about this massive federal land grab. And it’s gotten worse and worse and worse, and now we’re going to free it up, which is what should have happened in the first place. This should never have happened.
“That’s why today I am signing this order and directing Secretary Zinke to end these abuses and return control to the people — the people of Utah, the people of all of the states, the people of the United States.
“Every day, we are going to continue pushing ahead with our reform agenda to put the American people back in charge of their government and their lives.
“And again, I want to congratulate the Secretary. I want to congratulate Orrin and Mike and all of the people that worked so hard on bringing it to this point. And tremendously positive things are going to happen on that incredible land, the likes of which there is nothing more beautiful anywhere in the world. But now tremendously positive things will happen.”
The signing took place in a room at Interior with a framed portrait of Teddy Roosevelt, a bust of TR and mounted heads of a buffalo and deer on the wall. Among those in attendance were Sens. Mike Lee and Orrin Hatch of Utah and Lisa Murkowski of Alaska. Also Govs. Herbert of Utah and LePage of Maine.
Reversing Education Reform
Trump walked into the Roosevelt Room at 2:44 p.m., having been introduced by Vice President Pence. He was greeted by a group of about 25 people, including teachers, lawmakers and governors, and Education Secretary Betsy DeVos, according to Boyer’s pool report:
A bit of banter:
Mr. Trump joked with Nevada Gov. Brian Sandoval, incoming head of the National Governors Association, about the length of Sandoval’s prepared remarks, with Trump saying he decided to stay in the room after his own comments because “I know it’s going to be a short speech” from Sandoval.
Mr. Sandoval laughed and told the president, “It just got shorter.”
A few moments later during his remarks, Mr. Sandoval said, “I’m going to skip a page.”
The president, standing to the rear of the group, called out, “Education for North Korea.”
During the event, Mr. Trump also said he was heading afterward for a “very important” briefing for senators on North Korea.
During the president’s formal remarks, he said the education executive order will help to restore local control of education. It calls for a 300-day review of Obama-era regulations and guidance for school districts and directs DeVos to modify or repeal measures deemed an overreach by Washington.
“We know that local communities do it best and know it best,” the president said. He called it “another critical step to restoring local control, which is so important.”
“Previous administrations have wrongly forced states and schools to comply with federal whims and dictates for what our kids are taught,” he said. “The time has come to empower teachers and parents to make the decisions that help their students achieve success.”
Among those in attendance were Sen. Lamar Alexander, Rep. Virginia Foxx and Alabama Gov. Kay Ivey, Gov. Herbert of Utah and LePage of Maine, and Iowa Gov. Terry Branstad, nominee for ambassador to China.
Mr. Trump told Mr. Branstad, “They’re looking forward to seeing you” in China.
From there, Trump honored the Teacher of the Year, who, surprise surprise, is the first to be from a charter school in the 65 years of the award.
Boyer reports no questions taken at this event.
Pool was ushered into the Oval Office around 4:45 p.m. to find the President seated at the Resolute desk, surrounded by 55 teachers from around the nation, plus First Lady Melania Trump (who is celebrating her birthday), Vice President Pence, Second Lady Karen Pence and Education Secretary Betsy DeVos.
The President congratulated Sydney Chaffee, winner of the 2017 National Teacher of the Year, from Codman Academy Charter Public School in Dorchester, Mass. The ninth-grade teacher is the first charter school teacher to win the award in its 65-year history, and also the first from Massachusetts.
“That is really something special,” Mr. Trump said.
The president also thanked the group for having sung “Happy Birthday” to the First Lady before your poolers arrived.
The president greeted your poolers with, “Busy day, hasn’t it been?”
He praised the teachers as “the greatest there are. You’re all great, great teachers.”
Near the conclusion of the president’s comments, as he was saying he hopes the teachers’ trip to the White House was special, one unidentified teacher began to cry, apparently tears of happiness.
“Sorry, I’m always crying,” she told the president.
The President told her, “I’ve had some of the biggest executives in the world, who have been here many times, and I say have you been to the Oval Office? No. They walk into the Oval Office and they start crying. I say ‘I promise I won’t say to your various stockholders [that they cried].”
The president did not answer a question shouted near the end about North Korea.
Meanwhile, the outline of his tax plan was unveiled which would:
Slash the corporate tax rate by 60%, from 35% to 15%. This will lose $2.4 trillion over 10 years—enough to fund Medicaid and CHIP (the Children’s Health Insurance Program) serving nearly 75 million Americans for five years.
Cut the tax rate paid by Wall Street money managers and real estate tycoons like Trump down to just 15%―far less than many middle-class families pay.
Continue tax breaks that encourage corporations to send jobs and profits offshore. Corporations currently have $2.6 trillion in profits stashed offshore, on which they owe $750 billion in taxes.
The theory – by Republicans since Ronald Reagan – is that the deficit in tax revenues would be made up by economic growth, except that has never been the case.
In reaction, Senator Bernie Sanders (I-Vt) stated:
“At a time when we have a rigged economy designed to benefit the wealthiest Americans and largest corporations, President Trump’s new tax plan would only make that system worse. He would slash taxes for himself and his billionaire friends and significantly increase the deficit, while doing little to help rebuild the collapsing middle class. Rather than making large profitable corporations – many of which pay nothing in federal income tax – finally contribute their fair share, Trump wants to give them a huge tax break.
“At a time when Trump wants to make major cuts in education, health care, senior programs, nutrition and affordable housing, it is especially outrageous that he would propose the elimination of the Estate Tax and provide a $353 billion dollar tax giveaway to the wealthiest 0.2 percent – including a tax break of up to $4 billion to the Trump family.”