releases: https://www.heitkamp.senate.gov/public/index.cfm/press-releases?ContentRecord_id=267DAC98-7CB3-4671-A9E0-282379853F3C
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| https://www.heitkamp.senate.gov/public/index.cfm/press-releases?ContentRecord_id=267DAC98-7CB3-4671-A9E0-282379853F3C | The Truth about the Senate Republican Tax Reform Bill | 2017-12-04 | 2017 | 2017-12 | Democrat | House | ND | Heidi Heitkamp | H001069 | www.heitkamp.senate.gov | legacy | WASHINGTON, D.C. – U.S. Senator Heidi Heitkamp today released the following information explaining the truth about the Senate Republican tax reform bill. Click here to read Heitkamp’s statement about her vote against the bill. THE TRUTH ABOUT THE SENATE REPUBLICAN TAX REFORM BILL FACT: The Senate Republican tax reform bill will explode our country’s debt, adding nearly $1.5 trillion on the nation’s credit card – and that’s in the best-case scenario. WHAT THIS MEANS: The bill will put our kids on the hook to pay for its exorbitant cost without substantially growing the economy. We need to have an honest conversation about what American families are getting for that $1.5 trillion, because that’s a really big bill to put on our kids’ shoulders. And it will have a huge impact on their futures. [CBO, 12/2/17] With $1.5 trillion, there are so many better, smarter ways the Senate could invest that money that would actually support working families and stand up for our kids’ futures. With this same amount of money, the Senate could give every taxpayer making less than $200,000 per year a $9,000 tax cut, rather than disproportionately helping the wealthy as this bill does. Or the Senate could invest that money, in priorities such as finding a cure for Alzheimer’s and cancer, rebuilding our country’s degraded infrastructure, expanding opioid abuse prevention and treatment programs, or fixing the country’s pension crisis. All of these priorities will be crowded out by the Senate’s deficit financed tax bill. The Committee for a Responsible Federal Budget concludes that the real cost of the Senate bill could be $2.2 trillion, and debt would exceed the size of the economy in just over a decade. [CRFB, 11/15/17] The drastic increase in the federal debt will likely require Congress to pay for it by reducing spending elsewhere. As a result, there could be to severe cuts to and the elimination of critical programs that middle income families rely on. According to the nonpartisan Congressional Budget Office, Republicans’ bill would trigger automatic spending cuts, including: [The Hill, 11/14/17] Cutting $400 billion from Medicare that would take away health care from seniors. AARP opposes the bill. Wiping out $20 billion from agriculture programs that farmers and ranchers depend on like commodities, livestock assistance, conservation, specialty crop research initiative, beginning farmer and rancher development program, rural energy for America program, and specialty crop block grants. Plus, because of these costs, the federal government risks making it unaffordable to do a Farm Bill next year. [Politico, 11/30/17] Reducing Customs and Border Patrol operations that protect our borders and keep communities safe. Cutting student loan assistance that enables students to afford college. Slashing Essential Air Service, a vital federal program which enables North Dakota’s smaller airports to serve rural communities, support local jobs, and boost economic development. The program invests $4.2 million in Dickinson’s airport, $4 million in Devils Lake’s, and $2.8 million in Jamestown’s each year. Eliminating federal oil, gas and coal payments to states. States currently receive 50 percent of the revenues from minerals extracted from federal lands in the state. These funds are used by states to pay for road, schools, firefighters, and other public services. For North Dakota, it would mean the loss of $40 million next year. [U.S. Interior Department] CONSERVATIVES AGREE: 37 top economists from the University of Chicago said that the Republican tax reform bills would cause the U.S. debt to increase much faster than the economy would grow. [University of Chicago, 11/21/17] The conservative American Enterprise Institute stated, “This tax bill is also terribly flawed. Its benefits are too tilted toward wealthier Americans. It would increase deficits and debt at a time when both are already high and headed higher. And the changes to business taxes are hardly constructed to optimize economic growth.” [AEI, 11/29/17] FACT: The Senate Republican tax reform bill won’t grow the economy or create jobs in the way Republicans say it will. WHAT THIS MEANS: Republicans’ claims that this bill will provide robust, sustained economic growth are not true, and many large companies have admitted it. Many companies have said they will turn over most of the gains from corporate tax cuts to their shareholders rather than hiring more workers – creating more have and have nots and disproportionately hurting families across North Dakota. Some economics and company executives are making clear that bringing their tax rate down won’t cause them to hire more workers. [Politico, 11/30/17] CONSERVATIVES AGREE: Bruce Bartlett, a senior Treasury and White House economic official under two Republican presidents, said, “Virtually everything Republicans say about taxes today is a lie. Tax cuts and tax rate reductions will not pay for themselves; they never have.” [USA Today, 9/27/17] Phillip Swagel, President George W. Bush’s top economist at the U.S. Department of Treasury, called Treasury Secretary Mnuchin’s claims that the tax cuts will pay for themselves “just implausible.” [WSJ, 11/17/17] FACT: The Senate Republican tax reform bill gives the vast majority of tax cuts to wealthy Americans while middle and low income families get the crumbs. WHAT THIS MEANS: With this bill, Republicans are buying off middle income families by giving them almost nothing, while wealthy Americans get the vast majority of the tax cuts. Tax reform must support workers, families, and retirees – but this bill does the opposite. Instead, this tax bill is just unfair -- providing permanent tax relief for corporations and the wealthy, while making tax credits for middle income families temporary, phasing them out in 2025. According to the Joint Committee on Taxation, with this bill, $34 billion in tax cuts will be invested in in 572,000 Americans who make over $1 million – averaging $59,000 per person. On the other hand, $14 billion in tax cuts will go to 90 million taxpayers who make under $50,000 per year – averaging $160 per person. [JCT, 11/11/17] According to the Institute of Taxation and Economic Policy, in North Dakota, the top one percent – those making over $604,800 – will see an average tax cut of $46,870. Meanwhile, North Dakotans making under $75,220 – 60 percent of those in North Dakota -- will get an average tax cut of just a few hundred dollars. [ITEP, 11/17] Then, in 2027, on average, North Dakotans will see a tax increase of almost $10,000. On the other hand, rather than disproportionately helping the wealthy as this bill does, with $1.5 trillion, the Senate could give every taxpayer making less than $200,000 per year a $9,000 tax cut. [ITEP, 11/29/17] Because the tax breaks for middle income families are only temporary, the non-partisan Tax Policy Center concluded that half of all households nationwide would face a tax increase in 2027, including two-thirds of households making between $54,700 and $93,200. In North Dakota, the nearly 90,000 households earning under $105,000 per year would receive a tax increase under the proposal. [CBPP, 11/21/17] The bill punishes middle income families because the tax credits for them are only temporary and go away in five years. But the tax cuts for corporations are permanent. For families across the country, that creates economic uncertainty, while rewarding big corporations. On top of this, the bill would eliminate or drastically reduce many important tax breaks that support middle income families like the personal exemption, and state and local property tax deduction. FACT: The Senate Republican tax reform bill encourages outsourcing. WHAT THIS MEANS: The bill won’t bring jobs back to the U.S. because it supports foreign investors by giving them tax cuts for keeping jobs overseas, rather than incentivizing them to bring jobs to the U.S. and hire American workers. Rather than supporting families and workers, many of the biggest beneficiaries of this bill will actually be foreign investors, who according the Institute of Taxation and Economic Policy, will get $22 billion in tax cuts in 2027, while American families making under $90,300 will pay an additional $18 billion in aggregate taxes that year. [ITEP, 11/18/17] FACT: The Senate Republican tax reform bill will make the tax code more complex. WHAT THIS MEANS: Families need a tax code that is easier to understand and comply with. Right now there are six huge books that make up the tax code. And independent analysists have said this bill will add another book to that stack because of all the complications it will create. [WSJ, 11/14/17] This bill creates potential loopholes that will invite further abuses in the tax code and complicate tax filing for businesses. For example, it includes a loophole that supports companies that shift jobs overseas. [NYT, 11/13/17] On the business side, the bill will likely increase tax compliance costs for small businesses and pass throughs as a result of its new, untested pass through deduction model. On the international side, the changes are also untested and could significantly increase opportunities for gamesmanship of the tax code and/or lead to off-shoring of U.S. jobs. FACT: The Senate Republican tax reform bill will create uncertainty and losses for homeowners because the tax system will favor renting over owning a home. WHAT IT MEANS: The bill could have longstanding negative impacts on homeownership by reversing a century worth of tax policy that has valued homeownership as a key driver of retirement security for families across the country. The North Dakota Association of Realtors and North Dakota Homebuilders oppose this bill because it will take away incentives for people to purchase homes by nearly doubling the standard deduction which eliminates most itemized deductions. If fewer people buy homes, home values will decrease, hurting property values for those who already own homes.[Washington Post, 9/27/17] Homeowners in every state will be double taxed for state and local taxes because the bill will drastically reduce how much homeowners can deduct on their property taxes. According to the National Association of Realtors, the direct result of these changes will be a plunge in home values across America in excess of 10 percent, and likely more in higher cost areas. The provision in the bill that will restrict the use of the exclusion of gain on the sale of a principal residence would exacerbate the effect, especially for young homeowners seeking a starter home. FACT: The Senate Republican tax reform bill will hurt farmers and ranchers. WHAT THIS MEANS: The bill could lead to drastic cuts in farm programs and make a new Farm Bill unaffordable. The drastic increase in the federal debt will likely require Congress to pay for it by reducing spending elsewhere. As a result, there could be severe cuts and the elimination of critical programs including wiping out $20 billion from agriculture programs that farmers and ranchers depend on like commodities, livestock assistance, conservation, specialty crop research initiative, beginning farmer and rancher development program, rural energy for America program, specialty crop block grants. Plus, because of these costs, the federal government risks making it unaffordable to do a Farm Bill next year. [Politico, 11/30/17] The rushed process and the resulting lack of clarity on key agricultural provisions could be harmful to North Dakota agricultural producers, by making substantial changes to critical provisions like accelerated depreciation (Section 179), carryback provisions, “like kind” exchanges, and Section 199 for cooperatives, all of which could be capped or reduced depending upon the outcome of Senate floor procedures. The North Dakota Farmer’s Union opposes the bill. FACT: The Senate Republican tax reform bill will directly hurt millennials who will face tougher futures. WHAT THIS MEANS: The bill targets millennials through changes to home ownership, increased rates on lower income brackets, the child tax credit, and by drastically adding to the country’s debt – which will have a cumulative effect on young adults. [Cosmopolitan, 11/29/17] Millennials, in part because they tend to have lower incomes and are saddled with student loan debt, will see almost zero benefit from this bill. Median income for millennials across the country is relatively low, at about $24,000 per year in North Dakota. Under this bill, tax cuts for those earning less than $75,000 a year will phase out by 2027, leaving many of those Americans with tax hikes instead. [Washington Post, 11/16/17] Analysis from the Joint Committee on Taxation shows that for those making less than $30,000 per year, nearly 50 percent won’t see any significant benefit from the bill by 2019. And only 39 percent will see a tax decrease of $100 to $500. [JCT, 11/27/17] The bill makes it hard for millennials to buy homes and puts those at a disadvantage if they recently bought a home. Homeowners in every state would be double taxed for state and local taxes because the bill will drastically reduce the amount homeowners can deduct property taxes. The bill will take away incentives for people to purchase homes by nearly doubling the standard deduction which eliminates most itemized deductions. If fewer people buy homes, home values will decrease, hurting property values for those who already own homes. The bill will also require homeowners to stay in their homes for five years before receiving the capital gains exemption, which may prevent millennials from buying a first home. [Washington Post, 9/27/17] The child tax credit won’t fully apply to many millennials. Even though the tax credit is doubled under the bill, the tax credit is limited to just 15 percent of an individual’s income. Therefore, only high income earners, which tend to not be millennials, will get the full $2,000 tax credit. [Vox, 11/15/17] Additionally, millennials and younger generations will have to deal with the impact of this bill on future budgets. It will increase the national debt by nearly $1.5 trillion. FACT: The Senate Republican tax reform bill will hurt North Dakota’s energy industry. WHAT THIS MEANS: Wind, oil, gas, and coal will see decreased support because of the bill. The drastic increase in the federal debt will likely require Congress to pay for it by reducing spending elsewhere. As a result, there could be severe cuts to and the elimination of critical programs including federal oil, gas and coal payments to states. States currently receive 50 percent of the revenues from minerals extracted from federal lands in the state. These funds are used by states to pay for road, schools, firefighters, and other public services. For North Dakota, it would mean the loss of $40 million next year in federal oil, gas, and coal payments. [U.S. Interior Department] Provisions in the bill will weaken the effectiveness of the Production Tax Credit (PTC) that supports the development of wind energy, including in North Dakota. Heitkamp specifically worked to extend the PTC in a deal she helped negotiate that Congress passed in December 2015 to lift the decades-old ban on exporting oil and pair it with tax credits for renewable energies, including extending the PTC. For more than a year and a half, she worked with U.S. Senator Lisa Murkowski (R-AK) to build support in Congress for lifting the ban, reach a deal with Democrats that included support for renewable energies like wind to gain bipartisan support for the deal, and get enough votes to change this outdated policy. As a result, North Dakota’s wind sector has expanded since 2015. FACT: The Senate tax reform bill will lead to a decrease in charitable donations to nonprofit organizations. WHAT THIS MEANS: Nonprofits that support education, health care, financial literacy, and many other causes that impact every part of North Dakota will lose out. The bill could curtail up to $18 million per year in charitable giving and subject nearly 50,000 non-profit jobs in North Dakota to uncertainty. [JEC, 11/28/17] ### | 1 | 2026-03-30T12:14:52Z | 2026-03-30T12:14:52Z |