Benefits / Tax Cuts
This is the approved revision of this page; it is not the most recent. View the most recent revision.
This is a collaborative knowledge base; feel free to propose edits/additions that you believe are important for others to know. Contributions will be reviewed and approved based on quality and accuracy.
- 1 How You Can Resist
- 2 Recent Updates
- 3 Food Stamps (SNAP)
- 4 WIC and Food Deserts
- 5 Unemployment Benefits
- 6 Trump/GOP Tax Reform Proposal
- 6.1 Expanding Child-Care Benefits
- 6.2 Changing Tax Brackets
- 6.3 Tax cuts for married couples
- 6.4 Tax Cuts for the Wealthy
- 6.5 Tax Cuts for Businesses
- 6.6 Tax Increases for Homeowners and People Giving to Charity
- 7 Social Security (OASDI) and SSI
- 8 Vulnerabilities in Their Strategy
How You Can Resist
- Call your Senator and US Representative by dialing tel:844-6-RESIST and tell them to vote against proposed actions that cut taxes for the highest earners.
- Find out when your Senators and US Representative are holding town halls and other Upcoming Events/Opportunities. Show up and tell them not to cut taxes for the highest earners.
- Click here to find an organization looking for volunteers.
- In an effort to expand child credit's and reduce childhood poverty, Democratic Senators Michael Bennet (CO) and Sherrod Brown (OH) have proposed a bill called The American Family Act. The bill is projected to lift 5.3 million children out of poverty and 1.9 million out of deep poverty, if passed. The bill proposes of 2017 paying each family the following :
- $3,000 per year, or $250 per month, per child ages 6 to 18
- $3,600 per year, or $300 per month, per child ages 0 to 5
- Trump's tax reform plan is incomplete. It has little to no information on tax bracket limits, standard deductions, or personal exemptions. His reform outline has no information about what a tax subsidy to care for children means. Corporate tax preferences can have major impacts on the cost of the Trump plan and the distribution of its benefits among people of different income groups.
- Experts warn major tax cuts can mean major cuts in state services. For example, in Douglas County, residents have voted to do away with a $6 tax on a median priced home to fund the area's libraries. This resulted in closing of 11 local library branches. Also, there were cuts to the sheriff’s budget, which means the end of round-the-clock staffing. Even conducting an election this fall could be beyond reach.
- Trump's radical tax reform plan can face severe resistance from the housing lobby, governors of states with already high taxes. Tax breaks disproportionately benefit those tax payers who can itemize their deductions. According to the joint committee on taxation, in 2014, 90 percent of the beneficiaries of itemized deductions were tax payers who earned over $100,000. It is usually the argument of the state governments that local and state tax deductions help balance power between federal government and states. Administering federal tax cuts by eliminating state tax deductions would create "double taxation" of income which might not be in the best interests of house republicans.
Food Stamps (SNAP)
Supplemental Nutrition Assistance Program helps people buy healthy food. The majority of recipients are children or elderly with many working. In a 2012 report, 45 percent of SNAP recipients were under 18 years of age and nearly 9 percent were age 60 or older. More than 40 percent of recipients lived in a household with earnings. SNAP has been essential in preventing families from falling into poverty. In 2011, SNAP was shown to lift 4.7 million households out of poverty. Without the program, the child poverty rate would be almost 3 percentage points higher. During economic downturns SNAP can respond to meet the increased need. As the first recession was hitting its stride, SNAP was able to efficiently expand and serve families hit the hardest by the recession after effects like job losses and foreclosures. And then as the economy improves, the program contracts accordingly. Poverty increased during the recession, but food insecurity remained flat due in large part to SNAP's role in helping keep food on the table for families that needed it most. SNAP benefits the economy, and USDA research shows that for every $5 in new SNAP benefits, $9 of economic activity is generated. The food that families purchase with their benefits to meet their needs helps keep local businesses making money.
The largest group that received SNAP benefits according to 2013 data was white. The breakdown according to the U.S. Department of Agriculture, was 40.2 percent of SNAP recipients are white, 25.7 percent are black, 10.3 percent are Hispanic, 2.1 percent are Asian and 1.2 percent are Native American. Three quarters of the 22 million households that received SNAP benefits in 2014 included a child, an elderly person or someone with a disability.
To find the usage of this program by Congressional district click here.
- Trump has shown that he will act against key protections for Americans like SNAP with comments that the program "shouldn't be needed often", and that "when half of food-stamp recipients have been on the dole for nearly a decade, something is clearly wrong, and some of if has to do with fraud."
- Cuts to SNAP would be immediately damaging. The House version of the Farm Bill would cause 2 million Americans to lose their benefits entirely, 210,000 children to lose access to free meals at school, and 850,000 households to see their benefits cut by an average of $90 per month.
WIC and Food Deserts
The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides Federal grants to States for supplemental foods, health care referrals, and nutrition education for low-income pregnant, breastfeeding, and non-breastfeeding postpartum women, and to infants and children up to age five who are found to be at nutritional risk.
The program is voucher based, and has a list of foods that are high in nutrients such as protein, fiber, iron & calcium. WIC accepting locations often also accept SNAP, and are required to keep a certain number of foods that meet the WIC nutritional standards in stock. Participants will turn in a voucher that covers all or most of the cost on food items such as bread, eggs, milk, fruits & vegetables.
In addition to safeguarding the health and well being of low-income women, infants and children, WIC has provided opportunities for small businesses and corner stores to grow and sustain their businesses in food deserts, which are areas where fresh or healthy food options are rare, or altogether missing. Many of these small business owners are able to stay in business because they are able to provide local options for buying food, where few or no options are available.
The largest group that received WIC benefits according to 2012 data was white. A breakdown according to the U.S. Department of Agriculture in 2012 reports 58.2 percent of all WIC participants reported their race as White Only, 19.8 percent reported as Black or African American Only, 12.2 percent reported as American Indian or Alaska Native Only, and 3.9 percent of participants reported as either Asian Only or Native Hawaiian or Other Pacific Islander Only. Two or more races were reported for 5.1 percent of WIC participants. For ethnicity, 41.5 percent of participants reported as Hispanic/Latino.
For more information on program requirements and how to determine eligibility, please follow the link.
The Department of Labor's Unemployment Insurance (UI) programs provide unemployment benefits to eligible workers who become unemployed through no fault of their own, and meet certain other eligibility requirements, most of which will vary from state to state.
Unemployment benefits largely focus on providing for immediate financial needs for people who are currently out of work but are able and available to work, with the intention of looking for and securing employment while receiving unemployment. In addition to supplementing income, unemployment benefits can also include job training and readiness programs. Most programs for collecting unemployment require participants to enroll in and attend re-employment seminars.
Unemployment benefits through the Department of Labor's Unemployment Insurance programs are not available for individuals who are out of work due to injury, or disability, although there are other programs to support these people. Unemployment benefits require certification for continued eligibility on a weekly, or bi-weekly follow up. This means that your state agency that you have filed with to receive these benefits requires you to share information on any job applications, job offers, or job refusals. Recipients may also be required to register with a state Employment Service, so that they can get assistance in finding a job in a timely manner .
The unemployment rate in your Congressional district can be found by clicking here and selecting workers.
The White House fully intends to implement a law that would allow states to drug test any applicant for unemployment benefits. The previous restriction only tested applicants who do jobs that require drug testing. However, in instances around the United States drug testing Unemployment Insurance applications has repeatedly shown to be a failure at best and a waste of resources at worst. In Tennessee, only one person in the 800 who applied tested positive. In Florida, during the four months the state tested for drug use, only 2.6% of applicants tested positive, which is well under the state-wide illegal drug use rate of 8%. The Florida law wasted taxpayer money and was eventually ruled unconstitutional.
Trump/GOP Tax Reform Proposal
On April 26, 2017, the White House released a one-page document outlining the Trump administration's new proposed tax plan. So far, no legislation has been introduced to implement it. Treasury Secretary Steven Mnuchin and director of the administration’s National Economic Council Gary D. Cohn presented the plan to reporters.
The U.S. Federal Bureau Budget Deficit is the difference between what the government takes in from taxes and other profits, and the amount of money it spends.
While the tax plan did not give many details, the proposal includes several key changes that would increase the deficit, or the excess amount of money spent. Experts argue that this new plan only proposes tax cuts, with no plan to make up for them. This may reduce economic growth instead of increase economic growth, which goes against the administration's promises.
Expanding Child-Care Benefits
The Trump administration’s tax proposal may include tax credits for child care. How much this would increase the deficit is unknown.
In 2016, the administration had considered adding child-care benefits such as:
- Child-care savings accounts based on income rates. Experts argued that these savings accounts would benefit the wealthy more than low-income families. For example, the top wealthiest income bracket gets taxed 39.6% of their income. That means for every $1,000 deposited in the child-care savings account, they would save $396 in tax. But a family in the bottom tax bracket, who are taxed at a 10% rate, would save just $100 on the same $1,000 deposit. Wealthy families already benefit from being able to afford child care that low income families do not.
- Child-care spending rebate. This means a partial refund for low-income parents. The Trump campaign described it as “half of the payroll taxes paid by the lower-earning parent, and would be subject to an income limitation of $31,200.” For low-income married couples, both spouses would have to work, and does not apply to stay-at-home parents. By contrast, a wealthy couple with only one working spouse would still be able to afford more care to begin with, and would benefit from other tax breaks. 
The previous proposal gave the biggest tax cuts to higher income families. It would also raise taxes on millions of lower- and middle-income families. This includes more than half of single parents. It also did not say whether the reduction would change depending on the age of the child, or how each state deduction would be measured.
Changing Tax Brackets
As of 2017, the US has seven tax brackets that tax individuals, married couples, and households differently based on how much money they make. The new tax plan proposes three tax brackets instead of seven, with tax rates of 10%, 25%, and 35%. The Trump administration has not outlined where each bracket's income cut-off begins or ends, which makes it difficult to see how it will affect the middle class. The wealthiest tax bracket would get a 5% tax cut, which could increase the deficit by almost $1.5 trillion.
Tax cuts for married couples
The Trump administration has proposed doubling the standard deduction for married couples. For the vast majority of homeowners, this would make little difference to their Mortgage Interest Deduction (MIDs). MIDs are interest paid on a mortgage that is not counted toward taxable income, reducing taxes paid by the homeowner. Middle class homeowners have smaller mortgage debts because they own less expensive property. Oftentimes, this means the interest they pay is less then the standard reduction, giving them no reason to itemize their property. Wealthy homeowners in expensive homes can still benefit from the MID, as they have more interest to write off.
Depending on whether you are single ($6,350), married ($12,700), or head of household ($9,350), you can deduct from your taxable income. The Trump administration has proposed doubling the amount you can deduct, which may benefit the middle class. However, since people could then elect to pay fewer taxes, this may increase the deficit by almost $1.5 trillion. 
Tax Cuts for the Wealthy
Repealing the AMT
The alternative minimum tax (AMT) is an additional tax used to tax items that are not covered by the regular income tax. It is meant to make sure the very wealthy do not avoid paying taxes on "add-ons" that are not included in their income.. In 2005, Trump had to pay an additional $31 million because of this law. The Trump administration would like to remove this requirement, which would benefit the wealthy and possibly raise the deficit by almost $.4 trillion. 
Lowering Capital Gains Tax
In this new plan, the Trump Administration has proposed removing the capital gains tax, which is a 3.8% tax on investment income. This 3.8% is in addition to a 20% investment tax, and helps fund the Affordable Care Act. Removing the tax is meant to make more people want to invest. This would increase the deficit by almost $0.2 trillion. 
Removing the Inheritance Tax
Trump's tax plan proposes repealing the inheritance tax, which taxes estates. The U.S. has the fourth-highest inheritance tax in the world. The Trump administration has said the estate tax is mostly a burden on farms and small business, but many argue that this will mostly benefit the very wealthy who own expensive estates. This would increase the deficit by almost $0.2 trillion.
Tax Cuts for Businesses
The Trump administration plans to reduce the corporate tax from 35% to 15%. It is estimated this would increase the deficit by $3.7 trillion.  The plan also includes a special one-time tax with, with no specific rate. This is meant to encourage corporations to bring back money made overseas.
Tax Increases for Homeowners and People Giving to Charity
The plan proposes getting rid of tax deductions (expenses that won’t be taxed) except for mortgage interest and money given to charities. State and local taxes would no longer be deductible. This negatively affects some people who live in states with high taxes, such as New York and California. This would reduce the deficit by $2.0 trillion.
Social Security (OASDI) and SSI
Supplemental Security Income (SSI)
Supplemental Security Income (SSI) is a federal program that provides supplemented income to help aged, blind, and disabled individuals who have little to no money of their own to pay for basic living needs, like clothing, shelter and food. SSI is not the same as Social Security—although recipients of SSI may also be eligible to receive Social Security. There is more information available on SSI on the Disability Rights page.
Social Security (OASDI)
Social Security (also known as OASDI) is a federally funded program meant to supplement the loss of income for people who have retired. Eligibility for Social Security is determined by how long someone has had a job in the United States that offers Social Security benefits. People work to obtain credits from the time they turn 21 until they turn 62, become disabled, or die—whichever comes first—to reach the amount of credits necessary to provide for their quality of life upon retirement. Social Security payments are monthly, and a recipient can begin obtaining these benefits at the age of retirement, which is currently 65. Due to the federal hiring freeze Trump ordered at the beginning of his time in office, some recipients of Social Security have experienced delays in receiving their Social Security checks. Since many Social Security recipients depend on this income to support themselves, these delays are harmful.
Congressional District Breakdowns
Breakdowns of use of these programs by Congressional District can be found here.
Vulnerabilities in Their Strategy
- Tax reform cannot be passed until two conditions are met: 1. Republicans will have to repeal and replace Obamacare and 2. They have to pass the 2018 budget. This is because Republicans want to pass tax cuts using special Congressional rules ("budget reconciliation") that would allow them to act without support from Democrats. However, they can only do this once a year, and they have already done it this year for health care. This means they have to wait until next year to introduce tax reform.
- On average, states with Republican leadership are more dependent on the federal government for funds than are Democratic states.