GOP Tax Bill Hurts Rural Communities
November 21, 2017
The Republican tax plan is a bad deal for working families and rural communities. The GOP plan raises taxes on middle-class families in order to give massive tax breaks to the wealthiest among us, while adding $2 trillion to the federal debt and incentivizing corporations to move jobs overseas. Here’s a look at some of the ways the GOP tax plan would harm farmers and rural communities:
The Republican tax plan will raise taxes on middle-class families in rural communities.
Washington Post Wonkblog: “The tax bill Senate Republicans are championing would give large tax cuts to millionaires while raising taxes on American families earning $10,000 to $75,000 over the next decade, according to a report released Thursday by the Joint Committee on Taxation, Congress' official nonpartisan analysts.”
Wall Street Journal: “In 2027, half of all U.S. households would pay more in taxes than if Congress did nothing. That includes 66% of the middle part of the income distribution. Meanwhile, among the top 0.1%, 98% of households would get a tax cut in 2027.”
The Senate GOP tax plan could lead to automatic spending cuts that would eliminate critical farm safety net programs.
National Farmers Union President Roger Johnson: “If Congress passes legislation that increases the deficit, they will subsequently be forced to cut federal spending. In the case of the tax bill, current law could require 100% sequestration of all commodity program payments and other farm bill programs. Tax cuts for the highest income brackets should absolutely not come at the expense of programs that protect our nation's family farmers and ranchers.”
Rural hospitals would be disproportionately impacted by the Senate GOP tax plan, which could trigger $25 billion in cuts to Medicare and leave 13 million more Americans without health insurance.
Star Tribune: “The Medicare changes could threaten the economic vitality of hospitals and clinics — who are often large employers, particularly in rural areas. ‘For most hospitals in Minnesota, Medicare is the largest single source of revenue,’ said the Minnesota Hospital Association in a statement on Friday. The cuts that would result from the GOP reforms’ passage ‘would harm hospitals, health systems and health care in our state.’”
Los Angeles Times: “But the 4% cuts would come on top of a 2% reduction in Medicare payments that was implemented four years ago under budget legislation approved by Congress in 2011. For some doctors and hospitals that are heavily dependent on Medicare — especially in rural parts of the country where few patients have commercial health insurance — those cuts could be particularly painful.”
Main Street businesses would be hurt by the corporate tax giveaway that incentivizes large companies to move jobs overseas.
Former National Economic Adviser Gene Sperling: “But there is another issue with the Trump- and GOP-proposed corporate-tax plan that has not drawn as much attention. A major provision of the plan—the full details of which are slated to be revealed on Thursday—fails its most basic claim: that it would ‘prevent companies from shifting profits to tax havens’ and limit ‘offshoring.’ Instead, the way that provision is designed, it would actually incentivize U.S. companies to move their operations overseas and to shift profits to tax havens.”
New York Times: “Republicans argue that this will benefit small businesses. In fact, a large majority of small-business owners already have personal tax rates below 25 percent. This provision would aid a small group of developers, investors and other tycoons who work in professions or industries where it is relatively easy to set up pass-through businesses. Like, yes, Mr. Trump and his family, who make their money from one such industry: real estate.”
Tax Policy Center: “Finally, many actual small businesses would miss out on the 25 percent rate. Owners of a family business, say a corner hardware store, are ‘active,’ they’d be subject to a top rate of 35.22 percent rather than 25 percent.”
The House GOP tax plan would raise taxes on farmers and farmer cooperatives across the country by eliminating a key deduction that allows cooperatives to deduct certain proceeds and pass those deductions directly back to their members.
Rural Radio Network: “This would also affect the payments cooperatives make to patrons each year, based on the amount of business done at the cooperative… ‘That’s an extra check with extra money in the hands of the farmer at the end of the year,’ He said. ‘Money that is spent in the community.’”
The House GOP tax plan deters local economic investments by getting rid of a tax credit that encourages infrastructure spending and redevelopment in rural communities.
Senate Joint Economic Committee: “Through a federal tax credit, the New Market Tax Credit funds hundreds of hospitals, daycare facilities, alternative energy projects, and small businesses each year, and has generated more than 750,000 jobs and $80 billion in community investments.”
The House GOP tax plan would hurt rural seniors and families with medical costs by taking away their ability to deduct their medical expenses.
Business Insider: “Cutting that deduction would hit people with high medical costs — those with chronic conditions that require medical devices and other expensive equipment — hard. At the same time, it would only save the federal government about $10 billion, not much in the scheme of the trillions in annual government spending. In particular, this will impact people whose expenses aren't covered by traditional health insurance, such as those who need long-term care.”
The House GOP bill gives a massive handout to the wealthy at the expense of working farm families by repealing the estate tax.
New York Times: “Mr. Trump has stated, incorrectly, that the tax is crushing ‘millions of small businesses and the American farmer.’ In reality, only about 80 small businesses and farms would fall under the estate-tax tent this year, according to the nonpartisan Tax Policy Center.”
Washington Post: “Only about 20 farms a year are subject to any inheritance tax, and in almost all cases, those farms have adequate liquid assets to cover the taxes without having to sell any part of the business to do so. After searching for 35 years for one example of a family farm that was lost due to the estate tax Iowa State professor Neil Harl stated simply, ‘It’s a myth.’”