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Current Events How the GOP tax plan affects you (and you and you and...)

Dec. 12, 2017
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At 2 AM on December 2nd, the Senate passed a 479-page tax bill by a narrow 51-49 margin. The 479-page bill, filled with scribbled hand-written notes and crossed out pages, was given to the Senate six hours before the vote. 

Imagine having 6 hours to read a near 500-page book and write a report on it. Now imagine that report affecting the lives of every American citizen. If you would want an extension, that’s understandable. But that was not the case for our Republican representatives. 
The Senate passed a nearly 500-page bill which they did not read, and their decision now stands to financially harm the rest of us.  

Background 

First and foremost, this tax reform bill is still just a bill. It’s not law. Although the House and Senate have both passed a tax reform bill, they each passed different versions of a bill and must agree and vote on a final form. Nevertheless, they both significantly harm young Americans. 

Economic reports show that not only will the GOP tax plan benefit the richest Americans most, but it also puts the weight of economic pressure on millenials. This is more or less a direct result of the two goals of the GOP tax plan: the first goal is to reduce taxes for all, but particularly for citizens already earning the most.  The second goal, which is far less discussed and far more dangerous, is to simplify the tax code—which requires Congress to get rid of the many tax exemptions that most citizens use. 

Here are 3 ways the GOP tax plan may affect you. 

How the Tax Plan Affects College Students 

The GOP tax plan, while under the guise of relieving middle class families from economic stress, actually puts more stress on any middle or lower class family that supports a current, future, or former college student.  

The House bill specifically eliminates an estimated $65 billion in benefits for student loan borrowers over the next decade. 

There are three especially harmful ways it does this:

  1. The bill gets rid of college tax credits. Tax credits are actual exemptions from taxes you have to pay, and while students currently have 3 major college tax credits to choose from, the GOP bill would reduce these 3 credits down to one, getting rid of $17 billion in tax credits.

  2. It gets rid of student loan interest rate deductions. This is another fancy term for a way that people get money back from the government. Any person making up to $80,000 a year that’s still repaying student loans can deduct up $2,500 in student loan interest paid. As of 2014, 12 million people benefitted from these deductions. But under the GOP tax bill, getting rid of these deductions would cost students a collective $24 billion over the next decade.

  3. The bill taxes graduate student tuition waivers. In other words, graduate students who are seeking to pay less for graduate college will have to pay more just to apply to pay less! That’s the equivalent of asking your roommate to unclog the toilet, and your roommate saying, “Well, first I have to poop in it more if you want me to unclog it.” It defeats the purpose! And these tuition waivers largely affect African Americans and those earning $50,000 or less who wish to continue college after their Bachelor’s degree. So not only does taxing these tuition waivers financially harm anyone wanting to further pursue an education, but it disproportionately harms lower-income people and people of color. 

These 3 eliminations of student benefits in the House tax plan largely expose the hypocrisy behind Republicans’ plan for education. While they claim to support more choices in student education, their tax plan largely discourages students from going to college—and, furthermore, punishes students by making college more expensive.

How the Tax Plan Affects Your (and Everyone Else's) Future

So what if you’re not a college student? Many of you might have just skimmed that first reason and thought, “I’m not going to college, what the heck does this have to do with me?” 

Well, despite GOP members of Congress claiming this plan is good for the economy, economic reports show that both the House and Senate tax bills will actually increase the deficit by $1.5 trillion by 2027. 1.5 trillion dollars! According to economic reports, the tax plan increases the very problem it was created to solve.

This estimate is largely ignored because, by 2027, the GOP members of Congress supporting this bill will either be retired or dead. If this tax plan passes, they do not have to be held responsible for generating the money needed to support the economy by 2027, or pay for the large population of baby boomers retiring right now (about 10,000 per day). They do not have to deal with the consequences of their actions. We do. 

Finally, About Those Tax "Cuts"…

They’re not permanent. To be clear: the tax cuts for corporations are permanent, but the tax cuts for actual people are not. 

The Republican tax plan certainly shows that in 2019, everyone will receive a tax cut. But that by 2021, taxes will increase for people making $30,000 or less. By 2023, taxes will increase for anyone making $40,000 or less. Finally, by 2025, tax cuts will expire for everyone, and we will all have to pay higher taxes. To be blunt: the tax plan shows that people with a low income will have to pay more just 3 years from now, and that will increase for everyone by 2025.  

So while Republicans in Congress tout that they’re giving tax cuts to everyone, their promise only lasts 2 years before backfiring upon lower-income earners. These lower-income earners are us.  As of today, the average income for anyone under 25 is $30,000 and anyone under 30 is $40,000. So by 2023, if you are anywhere between the ages of 20-30, you will be the first- and most-harmed by the Republican tax plan. 

People must research the long-term effects of this plan and ignore the short-term effects that Republicans are trying to sale. Because this tax plan is worse than a get-rich-quick scheme. It’s a get-a-little-less-poor-and-in-two-years-get-far-poorer scheme only benefiting corporations and  the wealthiest people in America. 

As Americans, we are told that we make choices and must live with the consequences.  If our family is struggling financially, if we’re in college debt, or if we’re working a full-time job and still can’t pay rent, we must have done something wrong to deserve it. But what about when it comes to policies outside our control? Specifically, what about when Congresspeople in D.C. make a decision that impacts the rest of us? 

At 2am on that Saturday morning, the Senate made their choice, but we will be the ones living with the consequences. 

The Silver Lining

Once again: this tax reform plan is still just a bill. We can still fight it! Whether you’re 15 or 25 or 30, we all have a voice in this and should make our voices as loud and constant as possible. Because if Congress is being willfully ignorant of the decisions they make at 2am, it’s our job to remind them of the consequences.

In the meantime, there are two main ways you can fight back:

  • Contact your representatives and ask them to vote against the tax bill. If your representatives already voted against the bill, this reaffirms that they made the right choice. On the other hand, if they voted for the bill but receive a lot of pushback because of it, they may change their minds.

  • Talk to your parents and other adults in your life about the tax bill and how it will affect you. It's understandable that most of us may not know much about what's in this bill. (That was the point of passing it so quickly, after all.) But it's still up to us to make sure we are all armed with the knowledge we need to fight for our rights. What do the adults in your life know about the bill and how it will affect your family? If the answer is "not much", suggest researching the bill together!