RPEC Weekly ACTION Newsletter – 11-15-2017

In This Edition

• House of Representatives Prepares for Tax Bill Vote on Thursday

 

House of Representatives Prepares for Tax Bill Vote on Thursday

Call 1-866-957-9069 to be connected to your U.S. Representative and tell them:

Vote NO on HR 1 “Tax Cuts and Jobs Act” as it hurts seniors by:

1. Cutting nearly $500 billion from Medicare and more than $1 trillion from Medicaid over the next 10 years
2. Cutting the Social Security COLA’s
3. Eliminating deductions for state and local taxes
4. Eliminating deductions for medical expenses

The House Tax bill has low-income seniors subsidizing the top 1% of wealth-holders, plain and simple.

1. Cutting nearly $500 billion from Medicare and more than $1 trillion from Medicaid over the next 10 years

The tax cuts for the wealthiest Americans are so massive that they plan to cut nearly $500 billion from Medicare and more than $1 trillion from Medicaid over the next 10 years to pay for them – but they will still add $1.5 trillion to the deficit.

Increasing the deficit by such a large amount will result in major cuts to Medicare, Medicaid, and discretionary programs like the Older Americans Act—and may even be used as an excuse to cut Social Security.

The CBO said $25 billion of those cuts would come from Medicare, the popular social insurance program that provides health care to seniors age 65 and up.

2. Cutting the Social Security COLA’s

Buried amid the deductions and credits, the House has made a major shift in tax policy that will mean an escalating tax increase on every American taxpayer over the ensuing decades.

Tax-writers have decided to shift the tax code’s inflation index from the Consumer Price Index, or CPI, to something known as chained CPI, which is a slower-growing method of calculating cost-of-living increases.

Pitched as a more accurate measurement of inflation, the chained CPI is really an attempt to reduce the deficit on the backs of senior citizens: The net effect would be a heavy benefit cut for Social Security, which only makes sense if you thought the elderly were getting too sweet a deal with their $1,360 a month in average benefits.

Even if this specific legislation doesn’t touch Social Security, make no mistake: It puts Social Security under threat.

Using the lower rate of inflation to calculate future tax rates means taxpayers will more quickly fall into higher tax brackets, meaning they will pay more in taxes than if Congress stuck with the traditional measuring stick.

It works out to taxpayers paying $128 billion more to Uncle Sam than they would otherwise over the next decade, and $500 billion more in the subsequent decade.

“It’s a sneaky political move. It’s a hidden tax increase that will be invisible to voters.”

3. Eliminating deductions for state and local taxes

The House plan would eliminate the state and local sales tax deduction (known as SALT). More than 800,000 Washington taxpayers claimed the SALT deduction for sales tax payments in 2015, with an average savings of $2,600. About 85% of all SALT claimants in Washington are middle-income.

4. Eliminating deductions for medical expenses

We can all deduct our medical expenses from our income to the extent they exceed 10% of our adjusted gross income. These can include health insurance premiums, nursing home fees, home care costs and even assisted living fees, if a doctor certifies the resident must live in the facility due to health care or cognitive needs. While most taxpayers don’t have health care expenditures exceeding 10% of their income, many seniors and others with disabilities do.

While this may not be huge for individual seniors, it helps them stretch their dollars. The AARP estimates that 70% of those who take the deduction are 50 or over and have incomes of $75,000 or less. For them, it can mean that they do not run completely out of funds and have to rely on Medicaid or at least postpone that eventual outcome. In addition, the deduction, sometimes, is used by adult children who pay for their parents’ care, helping reduce this financial burden.

 

Call 1-866-957-9069 to be connected to your U.S. Representative and tell them:

Vote NO on HR 1 “Tax Cuts and Jobs Act” as it hurts seniors by:

1. Cutting nearly $500 billion from Medicare and more than $1 trillion from Medicaid over the next 10 years
2. Cutting the Social Security COLA’s
3. Eliminating deductions for state and local taxes
4. Eliminating deductions for medical expenses

 

Your Voice for Retirement Security!