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Senate tax plan gives big tax breaks for the rich paid for by students and working families


Funding for 4,798 education jobs in Arizona at risk if U.S. Senate eliminates state and local tax deduction 

November 30, 2017—The U.S. Senate Finance Committee, along party lines, approved a multi-trillion tax bill that gives massive tax breaks to the wealthiest and corporations paid for by working families and students. The bill also could jeopardize the ability of states and local communities to fund public education to the tune of $370 billion over 10 years, leave 13 million Americans uninsured, and add $1.5 trillion to the nation’s deficit. 

The Senate bill prioritizes making the corporate tax changes permanent, and the individual tax changes expire. Thus, according to the tables produced by the Joint Committee on Taxation, when the individual tax cuts fully expire in 2027, the average Arizona teacher making a salary of $47,218 would see a tax increase of over $300. 

The Senate bill completely eliminates the SALT deduction for state and local taxes, threatening the ability of local communities to adequately fund schools, public safety, firefighting, and other critical infrastructure. Eliminating the state and local tax deductions could blow a hole in state and local revenue to support public education to the tune of $370 billion over ten years according to a detailed analysis by the National Education Association. In Arizona this could mean a cut of up to $355 million, and potentially 4,798 educator jobs threatened. Over 10 years, that means $3.5 billion lost from Arizona schools and communities.

Arizona Education Association President Joe Thomas says, “It is irresponsible to put funding for public education in Arizona at risk. This potentially could translate into cuts to public education, nearly 4,800 of lost jobs to educators, and overcrowded classrooms that deprive students of one-on-one attention. It is outrageous to give massive tax breaks for the wealthy and corporations paid for by students and working families. We ask Senators John McCain and Jeff Flake to soundly reject the Senate tax bill and we urge Governor Doug Ducey to call on them to oppose this terrible tax plan.” 
 
According to the Center for American Progress (CAP), the bill would substantially increase premiums in the individual market for health insurance, and middle-class families would bear the brunt of the price hike. The bill would eliminate the individual mandate, thus people would only purchase coverage when they needed it, resulting in premium increases due to adverse selection. The CBO estimates this adverse selection would result in a 10 percent increase in premiums. The 10 percent increase would be an even greater financial burden for families in states with higher premium levels, increasing costs by $2,060 in Arizona. The Senate bill would also mean in Arizona an additional 282,000 uninsured and a Medicare funding cut in 2018 of $477 million for the state. Further, the authors of this CAP report estimate that 124,000 people in Arizona would lose their Medicaid coverage if the individual mandate was repealed.

The bill also adds $1.5 trillion to the national deficit. For now, much of the tax cuts are deficit-financed, but the budget resolution that helped pave the way for this plan previews the next phase: future legislation to cut the growing deficit caused by tax cuts by demanding cuts to critical services that help working people, children, seniors, and others – Medicaid, Medicare, education, and more.
 
“Hypocrisy is at the heart of the tax plan approved by the U.S. Senate,” said NEA President Lily Eskelsen García. “It reveals the ill-conceived and misguided priorities of Republican leaders in Washington. Their plan takes from students and working families to pay for massive tax giveaways to corporations and the wealthy.”

 


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