Large Utah families, students big ‘losers’ under GOP tax plan, groups say

This article originally appeared in the Deseret News. To read the original article, click here

SALT LAKE CITY — Standing with Utahns who oppose the sweeping Republican tax reform proposals Monday, Tali Bruce described the various successes of her five children, including a grad student in physics, a pre-med student and a college football player.

“I have five amazing children,” she said. “One thing I never thought I would be calling them is losers, but that is what they are under this tax plan.”

Bruce, a Cottonwood Heights councilwoman-elect, said large families would pay $1,400 more a year in taxes over the next decade.

“That is a lot of money for a family of seven,” she said, adding if she can’t help her children with incidentals, their college education could be at risk.

Large families, college students, disabled veterans and people with chronic illnesses are some of the “biggest losers” under the House and Senate tax proposals, said Judi Hilman, a leader in Utah Indivisible.

“What we’ve seen is a lot of short-term thinking,” she said. “There’s also been this hope that people don’t look at the fine print.”

Utah Indivisible, Alliance of a Better Utah, Mormon Women for Ethical Government and other grassroots groups gathered outside the federal building to show how the GOP tax plans would cause hardship to Utah families and individuals.

The organizations called on Republican Sens. Orrin Hatch and Mike Lee to vote against the Senate bill, which passed out of the Hatch-led Senate Finance Committee last week. All four Utah GOP House members voted in favor of the House version of tax reform.

“Things are looking up for Utah families,” Lee said last week after the Finance Committee vote.

A family of four making $85,000 per year would get a $1,554 tax cut under the new Senate bill, Lee said, citing the Tax Foundation. The average middle-income family would eventually see an extra $2,969 in after-tax income every year, he said.

Hilman said many Utahns will have an unwelcome guest at their Thanksgiving tables this year: uncertainty. While the state’s congressional delegation touts the proposal as a boon to the state, Hillman said it’s like a teaser rate on a new credit card.

“Yes, there are some goodies in the first couple of years but those disappear fairly quickly, at least for those below the median income,” she said.

Hilman said both the House and Senate plans offer “massive” tax cuts to the wealthy and corporations at the expense of everyone else.

Hatch has taken vehement issue with that characterization, lashing out at a Senate colleague last week who made that assertion in the committee hearing.

The nonpartisan Joint Committee on Taxation concluded that the largest tax cuts — in terms of percentage of income — would go to middle-income earners, he said.

Hatch said by nearly doubling the standard deduction, lowering tax rates and doubling the child tax credit, Republicans have made good on their promise to deliver a bill that will improve the lives of average Americans plagued by a decade of sluggish economic growth.

Bonnie Mitchell, a former University of Utah law professor, noted that the House plan eliminates the deduction for medical expenses and long-term care, which sick and older people use to claim about $10,000 a year.

Mitchell, who has inherited connective tissue disease known Ehlers-Danlos Syndrome, said she has great medical coverage, but no insurance covered the $250,000 for an adaptive van, house modification for wheelchair access and home health aides.

“If we hadn’t been able to deduct both the interest from our second mortgage and medical costs borrowed from retirement savings, we would’ve had to cash out our home,” she said.

Lee said as good as the Senate bill is, it’s not perfect.

As written, he said it would provide little relief for families who pay far more in Social Security and Medicare payroll taxes than they do in income taxes.

Lee said that could be resolved by making the child tax credit — proposed at $2,000 in the Senate bill — refundable up to the amount that families pay in payroll taxes. The credit then would be more beneficial to families that most need extra cash in their pockets, he said.

Salt Lake Community College student Emily Jessop said she would lose $933 per year under the House plan to repeal the student loan interest deduction. She said that’s six months of groceries, gas for a year or two or three semesters of books.

Jessop, who will graduate with an associate degree next spring, said she will have to rely on student loans to continue her education.

“I’m extremely nervous and stressed with how I will be able to pay for the bare necessities along with everything that goes into college education, including tuition, books, fees, transportation costs, housing, food, insurance as well as for emergencies,” she said.

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