7 Ways Republicans' Final Tax Plan Would Impact Women's Lives Dramatically
Republicans announced Friday they'd finished merging key aspects of the party's House and Senate tax bills to create a final tax plan. While the biggest takeaway remains massive tax cuts for big corporations and the wealthy, the GOP's final tax plan would significantly impact women's lives as well.
Along with offering what many believe would be the largest cut to corporations' tax rate in the country's history, the GOP Tax Cuts and Jobs Act also stands to hand a larger tax break to the wealthiest people while moving to preserve some tax breaks for the middle class. Yet because women already experience economic inequality at a disproportionate rate and make just 80 cents to every dollar a man makes, this tax reform could stand to have a dramatic affect on them and their families.
Senior Republican Party members are hoping to see the the 505-page legislation approved sometime next week in order to have it on President Donald Trump's desk before the Christmas holiday. And with the support of Sens. Marco Rubio and Bob Corker, it appears as if they'll have the votes required to pass it.
Here are seven ways Republican's final tax plan stands to impact women:
1) Kills The Individual Health Insurance Mandate
With Republican's tax plan, the individual health insurance mandate, a key provision of Obamacare that penalizes people who don't have health insurance, would disappear in 2019. Killing the mandate will likely cause insurance premiums to rise, meaning low-income women could ultimately be priced out of their health care insurance. In fact, the Congressional Budget Office has estimated 13 million Americans will likely be without insurance within 10 years should the individual mandate be dropped.
While the disappearance of the individual mandate is bound to affect everyone in one way or another, women are more likely to be negatively impacted. According to the Commonwealth Fund, one third of women seeking to purchase health insurance plans prior to the passage of the Affordable Care Act were either turned away, charged higher premiums, or offered only plans that excluded specific health issue. In removing the mandate, women could once again find it more difficult to obtain and pay for health insurance.
2) Reduces Local & State Tax Deduction
The GOP's final tax plan moves to significantly scale back how much state and local taxes people can deduct from their federal income taxes. Under the GOP's plan, taxpayers would be limited to a state and local tax deduction of up to $10,000. That's a significant reduction from the current state and local tax deduction (SALT) law, which allows for an unlimited deduction.
It means many women could end up being unable to deduct the full amount of their local and state taxes. However, even the limited deduction is an improvement over the House's proposed tax plan, which called for eliminating the deduction of local and state income and sales taxes altogether while capping property tax deductions.
3) Individual Tax Cuts Would Expire In 2025
Under this final tax plan, individual tax cuts are scheduled to expire after 2025, meaning that while you might see their tax bill drop next year, it would likely go back up when the benefits expire unless Congress does something to save the cuts. In contrast to the temporary nature of individual cuts, the GOP's plan makes corporate cuts permanent.
4) Expands The Child Tax Credit
Republican's final tax plan would expand the child tax credit from $1,000 to $2,000 and allow those making up to $400,000 to benefit from the credit. The new plan is also set to expand the credit families who don't make enough money to owe federal taxes receive from $1,100 to $1,400, which could ultimately benefit low-income single mothers and families by increasing the credit they receive slightly.
5) Expands The Medical Expenses Deduction
While the House version of the tax plan called for eliminating the medical expenses deduction altogether, the GOP's final tax plan not only keeps the deduction in place but moves to temporarily expand it. Under current law, qualifying taxpayers can deduct medical expenses which total more than 10 percent of their adjusted income. The GOP's plan would drop the threshold for the deduction from 10 percent to 7.5 percent for 2017, 2018, and 2019. In 2020 the threshold would revert back to 10 percent.
In keeping this deduction in place, the plan would enable middle-class and low-income people to continue using the benefit to help alleviate the burden of costly medical bills.
6) Tax Brackets For Individuals Would Change
While the GOP's final tax plan retains seven tax brackets, those brackets would change. Currently the individual tax brackets sit at 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent, and 39.6 percent.
Under the new plan, however, they'll become 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. This means a woman making more than $9,525 but less than $19,050 would pay 10 percent in taxes while a woman pulling in more than $9,525 but less than $38,700 would pay 12 percent.
7) Personal Exemptions Eliminated
In exchange for raising the standard deduction rates, the GOP's final tax plan scraps personal exemptions. According to CNN Money, however, eliminating personal exemptions could counteract any help other provisions in the bill provide for families and low-income people.
This would have huge consequences for women; more women than men in America live in poverty, according to the National Women's Law Center. Women-headed families with children were also more likely to be poor, according to U.S. Census statistics, and that likelihood increases with families headed by black and Latina women.
While the GOP tax plan would have sweeping effects on all demographics, women, who already grapple with the gender wage gap and are more likely to live in poverty in every state in the U.S., it would certainly have a disproportionate impact.
According to CNBC, the House is set to vote on Republican's final tax plan sometime Tuesday. The bill will then pass to the Senate. President Trump has said he wants to sign the bill by Christmas.