On Tax Day 2018, health care and other vital public services are much less secure for America’s working families due to $1.5 trillion in tax cuts enacted late last year by President Trump and the Republican Congress.
- The tax cuts take revenue out of the federal budget that could be used for public services and investments and divert most of it to the richest households and largest corporations. When the new tax law is fully phased in, 83% of the tax cuts will go to the wealthiest 1%.
- Moreover, these tax cuts will explode the national debt and thereby endanger future funding for Medicare, Medicaid, Social Security and other public services working families rely on.
The Trump-GOP tax cuts put the interests of the wealthy and corporations over those of working families and local communities:
- The richest 1% of taxpayers will get 27% of the nation’s total tax cut. The bottom 60% of taxpayers will get just 13% of the tax cuts.
- The richest 1% will get a tax cut of $55,190, on average. The bottom 60% will get a tax cut of $440—about a dollar a day.
Prescription drug companies and health insurers will reap tens of billions of dollars in tax savings under the new tax law, but few are sharing the wealth with their workers, and none are planning to cut their drug or insurance prices:
- Among the top 10 U.S. drug companies just Merck and Pfizer have said that they will share any of their new tax cuts with employees in the form of one-time bonuses, wage increases or fringe benefits.
- Of the 10 biggest health insurance and managed-care companies just three—Anthem, Cigna and Humana—have said that they will share any of their new tax cuts with employees.
To pay for their $1.5 trillion in tax cuts that mostly benefit the wealthy and corporations, President Trump and the GOP Congress have targeted vital public programs, particularly health care, for service reductions:
- The new tax law reaps $314 billion in savings by repealing a key part of the Affordable Care Act (ACA), resulting in higher premiums and millions losing coverage. By eliminating the requirement that those who can afford it buy health insurance, the GOP will be responsible for 13 million Americans losing coverage by 2027 and insurance premiums spiking by 10%, or $2,000, on average in 2019 for the remaining insured who buy policies on the individual market.
- In his proposed budget for next year, Trump proposes more than $1.7 trillion in spending cuts. This would slash services that working families rely on:
- Health care: The Trump budget proposes repealing the ACA, which would cause 32 million Americans to lose their health coverage by 2027.
- Supplemental Nutritional Assistance Program (SNAP, or food stamps): Trump’s cuts to food stamps could cost more than 5 million households their benefits in 2019 and 5.5 million households could lose benefits by 2028.
- Disability programs: Trump cuts a total of $72 billion over 10 years from Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
- Infrastructure: Trump proposes cuts of $240 billion over 10 years to infrastructure programs. This includes a $99 billion cut to highway funding and $39 billion cut to transit funding between 2021 and 2027. These cuts could mean the loss of more than 1.7 million “job years” (one job for one year) over this time.
- Education: Trump’s budget eliminates federally-subsidized student loans, which could affect many of the 6 million college students who received $20.9 billion in aid last year.
- Affordable housing: More than 198,600 families could next year lose the housing vouchers that help them afford rent in private housing. $3.1 billion could be cut in 2019 from a fund to repair and upgrade public housing facilities. The HOME Investment Partnerships Program would be eliminated, costing $958 million that helps provide affordable rental housing and homeownership opportunities. The Community Development Block Grant program would be zeroed out, cutting $3 billion that helps localities pay for a variety of community and economic development services, including affordable housing.
The Congressional Budget Office, a non-partisan scorekeeper, now reports that the tax cuts will add $1.9 trillion to the deficit—nearly one-third more than the $1.5 trillion estimated when the tax law was approved in December. This is close to the $1.7 trillion cut to Medicaid, Medicare, Social Security disability programs, SNAP and more proposed in Trump’s budget.
Recently, the House of Representatives voted 233 to 184 in favor of a “balanced budget” amendment to the U.S. Constitution that’s anything but balanced: it would make cutting services for working families the only practical way of eliminating budget deficits. Increasing revenues—such as by repealing last year’s tax cuts for the wealthy and corporations—would be very difficult with Trump and Republicans in charge. Fortunately, it failed due to the need for a supermajority of 290 votes to pass.
We need a different direction. We call on our members of Congress to:
- Repeal the Trump-Republican tax cuts for the wealthy and corporations that explode the national debt and thereby threaten Social Security, Medicare, Medicaid, education and more.
- Make the wealthy and corporations pay their fair share of taxes so we can afford to strengthen our communities through long-overdue improvements in roads and transportation systems, schools, affordable housing, internet access and more.
- Instead of attacking the Affordable Care Act to pay for tax cuts for the wealthy and corporations, strengthen the ACA to provide even more Americans with quality, accessible health care.
- Instead of giving tax cuts to prescription drug companies and insurance companies, which have long price-gouged consumers and put healthcare out of reach for millions, Congress should lower prescription drug costs by allowing federal health programs to directly negotiate with drug firms, and it should lower health care costs by expanding not-for-profit healthcare programs like Medicaid and Medicare.
Following is an explanation of how the Trump-GOP tax cuts and budget cuts will benefit wealthy families and large corporations while hurting working families.