Larson: This Is An Assault on the Connecticut Middle Class
WASHINGTON, DC – Today, Rep. John B. Larson (CT-01) called the Republican tax bill as an attack on the Connecticut middle-class. This proposal is not intended to benefit the elementary school teacher, the machinist, or the nurse trying to raise their families in Connecticut.
“This plan is an assault on the Connecticut middle-class and their families. Connecticut residents already pay more in federal taxes than the state receives in federal funding, with Connecticut sending on a net basis nearly $8 billion to the federal government last year. How can getting rid of deductions for state and local taxes, medical expenses, or student loan interest be relief for the middle-class? It can’t. Rather, this punishes hard-working, people in the Northeast and specifically, in Connecticut, by taking away their itemized deductions and not providing them balanced relief. Furthermore, this proposal adds to the deficit by $1.5 trillion, which is a veiled way of achieving an old Republican goal of shrinking the budget to make cuts in Social Security and Medicare at the expense of seniors. It’s sad that there was an opportunity for bipartisan cooperation, but they chose to lead with a Republican-only bill, constructed behind closed doors, with no hearings, zero testimonies and no regular order. We plan to fight this tax plan every step of the way”, said Larson.
As we begin to look over this tax bill, here are some of the harmful provisions for Connecticut:
- Guts the state & local tax deduction, resulting in a 14% tax increase for Connecticut homeowners with incomes between $50,000 - $200,000.
- Eliminates the personal exemption (worth over $16,000 for a family of four).
- Eliminates the medical expense deduction.
- Eliminates deduction for student loan interest.
- Eliminates deduction for property casualty loss.
- Eliminates deduction for adoption expenses.
- Eliminates employer provided education assistance programs.
- Eliminates the credit for individuals over age 65 or who have retired on disability.
- Eliminates the deduction for dependent care assistance programs.
- Eliminates the credit for employer provided child care.
- Eliminates the Historic tax credit to for rehabilitation of historic buildings.
- Eliminates the work opportunity credit, which incentivizes the hiring of unemployed veterans and summer youth.
- Eliminates the New Markets Tax Credit.
- Eliminates the credit for expenditures to provide access to disabled individuals.
Larson supports a set of principles that the Ways and Means Committee Ranking Member Richard Neal (D-MA) introduced last week, as a path forward to tax reform. These principles reflect the values of the Democratic party and how Democrats see tax reform being implemented for the middle-class to support a vibrant, working economy. These principles focus on American competitiveness with good paying jobs, affordable educational opportunities, easing the tax burden on American manufacturing and making it affordable to raise a family again.
Democratic Principles for Tax Reform: Real Reform for Real People
Reforming the Tax Code to Provide Relief for Middle-Class Families
- Provide middle-class workers with a well-deserved “raise” to address years of income stagnation.
- Ensure that working parents are supported when taking paid family leave, including maternity and paternity leave.
- Strengthen the Earned Income Tax Credit by expanding eligibility and extending the childless workers’ credit.
- Expand the Child Tax Credit to help middle-class families care for young children.
- Help middle-class families afford quality and safe housing, buy a first home or pay the rent.
Reforming the Tax Code to Provide Education Opportunities for Middle-Class Families
- Expand and simplify the American Opportunity Tax Credit to help students and families pay for post-secondary education.
- Provide additional tax incentives for education at vocational and professional schools.
- Help middle-class students and families pay off their student loans by excluding from income employer-provided student loan debt repayments and increasing the student loan interest deduction.
Reforming the Tax Code to Assist Middle-Class Families with the High Cost of Dependent Care
- Expand access to and increase assistance for high quality child care, including expansion of the Child Care Tax Credit.
- Help American families with the rising costs of dependent family members and the care of elderly parents.
Reforming the Tax Code to Ensure a Secure Retirement for American Families
- Make it easier for middle-class families to save for retirement, including creating automatic IRAs or 401(k) plans, and expanding the Saver’s Credit.
- Strengthen and improve benefits for Social Security and Medicare.
Putting Americans Back to Work in Good Paying Jobs
Closing the Skills Gap
A key component of competitiveness in the global economy is investment in a well-trained and skilled workforce. A 2015 report by the Manufacturing Institute estimated that over the next decade, two million manufacturing jobs in this country could go unfilled due to the skills gap. The New England Council reported similar results. At a time when families across the country are trying to reach and stay in the middle-class, our nation cannot afford to have factories and workers sit idle.
- Providing a new tax credit to employers to train and hire new workers through apprenticeship programs and partnerships with community colleges and technical schools.
Expanding Infrastructure Investment and Enhancing Economic Development
We must improve our nation’s infrastructure, currently rated at a D+ by the American Society of Civil Engineers, to compete with other developed nations. That includes substantial investments to repair and enhance our nation’s roads, rail, bridges, and harbors. The new economy needs expanded broadband, energy access, and tools for smart growth to better serve individuals and businesses in our new economy. We also must continue to revitalize our urban neighborhoods and rural communities. These win-win reforms will jump start economic growth and create thousands of good paying, middle-class jobs for hardworking Americans. By making a significant investment in rebuilding our nation's infrastructure, we will be investing in American workers by creating jobs and financial stability for middle-class families.
- Invest revenue from tax reform to make a substantial down payment on our nation’s infrastructure needs.
- Make permanent the Build America Bonds program.
- Maintain and expand tax-exempt bond financing for infrastructure projects.
- Update current financing mechanisms for infrastructure investment.
- Leverage private investment to create public-private partnerships to ensure meaningful investment in community infrastructure.
- Make permanent the New Markets Tax Credit program and enhance the low-income housing tax credit and historic tax credit.
Strengthen the Competitiveness of American Businesses in the Global Economy
A key component of tax reform is ensuring that American businesses remain competitive in the global economy, and that we prevent American jobs from moving overseas.
- Increase the domestic manufacturing deduction and provide additional tax incentives to manufacturers that build and hire in the United States.
- Enhance the tax incentives for companies to conduct research and development in the United States.
- Provide tax relief and simplification to small businesses.
- Eliminate tax provisions that encourage companies to move American jobs overseas.