A new 50-state report released by the Senate Democratic Policy & Communication Committee (DPCC) found that Congressional Republicans’ and Donald Trump’s tax plan is yet another tax giveaway for the wealthy for which vulnerable working families across the country will pay.
The GOP’s tax plan “would actually raise taxes on about 182,000 Iowa households next year.” That’s about 12.5 percent of all Iowa households.
421,744 Iowa households (nearly one-third of all Iowa households) deduct state and local taxes, with an average deduction of $10,163. The GOP’s plan would take away that deduction.
Approximately 305,760 Iowa households deduct their mortgage interest payments when filing. Under the GOP’s plan, that deduction would become useless for most families unless their home was worth more than $801,000 – more than six times the median home value in Iowa ($126,200).
The average tax increase on families nationwide earning up to $86,100 would be $794, a significant burden for middle-class families. Here’s what Iowa’s middle-class families could do with that money:
- Pay for 1.1 months of child care
- Pay for 8.1 months of electric bills
- Pay for 2.2 months of health care premiums [JEC, 2017]
Middle-class families in Iowa making from $42,000 to $64,100 per year who do benefit would only see about 6.8 percent of the total benefits of the tax plan. [ITEP, 2017]
Millionaires in Iowa (only 0.15 percent of filers) would, in contrast, receive 42.6 percent of the benefits from the tax plan – over six times the benefits afforded to middle-class families. [ITEP, 2017]
There are only 70 estates in Iowa (0.2 percent of all estates) that are subject to estate tax, which only affects those whose estates are worth more than $5.5 million ($10.98 million for couples). [CBPP 2015]
The GOP’s plan also eliminates the personal exemption, which deducts $4,050 for each taxpayer and dependent on a return from taxable income. 866,440 dependent exemptions were filed by Iowans in 2015. [IRS, 2015]
The Earned Income Tax Credit (EITC), which encourages work for 214,700 low-income individuals in Iowa, helping them make ends meet with an average credit of $2,248, is yet another target of the GOP’s tax plan. [IRS, 2015; CBPP 2014]
The EITC and the Child Tax Credit is responsible for lifting approximately 70,000 Iowans – including 39,000 children – out of poverty each year. [CBPP, 2014]
Congressional Republicans and Donald Trump continue to spout partisan lines about how tax cuts will save working families, but the numbers tell a very different story. As usual, they’re only looking out for themselves and their wealthy donors.