Federal Budget and Taxes

Tax Cuts and Jobs Act Will Supercharge Racial Wealth Divide, Finds First-Time Analysis

Pennsylvanians, even more than other Americans, strongly support fair taxation—because Pennsylvania’s tax system is one of the most unfair in the nation, taxing middle- and low-income families at much higher rates than the richest 1%. Yet when Congress passed huge tax cuts on a party line vote last year, it made the U.S.

Rep. Fitzpatrick Made the Right Choice On SNAP Cuts; Unfortunately Rep. Costello Did Not

Last week, the House of Representatives voted against the troubling Farm Bill that had recently passed through the Agricultural Committee. This version of the bill would have resulted in many Pennsylvanians losing access to SNAP, otherwise known as food stamps, which is often the last defense against hunger in our communities. The proposed House Farm Bill would cut SNAP benefits by nearly $19 million and take away food assistance from two million Americans who already struggle to make ends meet. It would particularly hurt families, children and the disabled by implementing strict and ineffective work programs, as well as unforgiving reporting rules, that would lead to people losing this critical benefit.

The Trump Tax Bill Wasn't For You

It’s Tax Day 2018, and you know what that means?  The country’s wealthiest Americans are about to experience long-term gains from the Tax Cuts and Jobs Act.  The Pennsylvania Budget and Policy Center is concerned about the effects of the tax cut law and legislation that would make temporary tax cuts permenant after 2025.  A new report from the Institute of Taxation and Economic Policy shows that the top 1% will receive more federal tax dollars than the bottom 60% in 47 states, and the top 20% will gobble up the

Don’t be Fooled: The Extension of the Trump Tax Bill Primarily Benefits the Rich, Just Like the Original Law Does

Tax day is around the corner and many Pennsylvanians are busy gathering their W-2s, 1099s and other financial documents to submit their taxes for 2017. Meanwhile some Congressional leaders are making the case to extend temporary provisions to the Tax Cuts and Jobs Act (TCJA), which will expire after 2025. Republicans pushing for this legislation are spinning it as making permanent the benefits to the middle class. But, don’t be fooled.

A new report from the Institute on Taxation and Economic Policy documents how the extension of these so-called “middle class tax cuts” will continue to primarily benefit the richest Americans and will leave the poorest 20% paying higher taxes on average in 2026 than if the bill was never enacted.

The Unnecessary Federal Budget Impasse

Let’s be straight about the politics of the federal budget. The Republicans control the House, Senate and Presidency, but partly because they are not united and partly because they are short of the 60 votes needed under current practices to move most legislation in the Senate, they are unable to pass a budget without Democratic support. So to pass a full-year budget, Republicans and Democrats must compromise.

The federal government is shut down today because too many Republicans in Congress won’t compromise and because President Trump doesn’t appear to know what he really wants.

A Temporary Setback on the Way to a Just America

The Trump-GOP tax cut bill, which passed the House on a party-line vote with twelve Republicans voting against this afternoon and is likely to pass the Senate tonight, reminds us that history does not move in a straight line. There are moments, like this one, in which America takes a step away from its promise of equality and justice for all.

It redistributes from working people and the middle class to the rich. And that's just wrong.

With all the controversy over the details of the tax cut bill that is moving towards a final vote in the House and Senate this week it is easy to forget about the basic features of the bill. 

Limitations on the State and Local Tax Deduction Hurt Pennsylvania in Two Ways

A major issue in the debate over the Republican tax cut bill is whether the deduction for state and local taxes (the SALT deduction) should be eliminated or reduced. The conference committee bill released on Friday proposes a “compromise” that would allow individuals to deduct up to $10,000 in some combination of state and local property and income or sales taxes. 

That compromise is deeply problematic for Pennsylvania and many Pennsylvanians, in two different ways. 

First, substantial numbers of upper middle-class Pennsylvanians will see their taxes go up as a result of the limitation on state and local tax deductions in the conference committee bill. These taxpayers are likely to be concentrated in the suburbs of Philadelphia, where a high percentage of taxpayers take the state and local deduction. 

Second, the state as a whole will suffer because the limitation on the state and local tax deduction will make it more difficult for the state to raise taxes. This is a serious issue, especially at a time when the state suffers from both recurring budget deficits and a deep public investment deficit and yet there is little political will in the General Assembly to raise taxes. 

We consider these two problems in order after the break.

The GOP-Backed Tax Bill: A Lose-Now, Lose-More-Later Plan for Low- and Middle-Income Americans

GOP-backed tax bills have passed both the House and the Senate. Many of us have already seen charts which show how, under these plans, low and middle-income families will eventually see their taxes raised (by 2027), while the top 1% sees huge savings (see, for example, the chart below showing the Senate bill’s impact on Pennsylvania). What hasn’t been discussed as much is that these bills are step one in a two-part process, designed to severely cut critical government programs.

The GOP Tax Bill: An Assault on Economic Equality and Democracy

Budgets, it is frequently said, are an embodiment of our moral ideals and commitments. If so, the tax plan adopted by the Senate on Friday represents an extreme moral failure on the part of the senators from the Republican Party who voted for it. At a time when incomes are becoming ever more unequal, the Republican tax plan will ultimately make the rich richer and the poor and middle class poorer. Not only will working people and the middle class suffer, but so will our whole country. 

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