As the Senate nears a vote on the GOP tax bill, many Americans are wondering how — if it passes — it will impact them.
According to the non-partisan California Budget and Policy center, the plan “overwhelmingly” benefits corporations and the wealthy and overtime could hurt low and middle-income Americans.
“If you’re a low-income household or minimum income household, you’re getting some temporary cuts in some cases,” Chris Hoene, the center’s Executive Director, explained, “And then those cuts are expiring and you’re getting tax increases over the next 10 years.”
Other groups of people — including Californians, veterans, and freelance workers — could be hurt as well.
Here is a break-down of who or what might negatively feel the impact, according to the California Budget and Policy center.
The bill would likely end state and local tax deductions, which could mean Californians pay more taxes.
“If you were a tax payer in any state, you are going to lose under that plan,” Hoene said. “But in states where the sales taxes are higher, or where the income taxes are higher, you are going to lose more. So, it’s particularly bad for California.”
It’s possible that the tax plan could impact services for veterans.
“There are a set of provisions in the GOP tax bills, both on House and Senate sides, that would actually take an exemption for the bonds that are used to fund the development of facilities for veterans, housing for hospitals, and for a variety of other public structures,” Hoene said.
“Taking away those exemptions, which has been what makes them an attractive investment, means that they’ll be less attractive investments to people who have the money to put into those sorts of things,” he added.
Many college and graduate students with student loans could end up paying more taxes.
“Particularly folks who are in graduate school are taking on student debt in order to go to graduate school, and so they have high payments going forward,” Hoene said. “And one of the ways that is off-set is through the deductions they get in the federal taxes, and that deduction would be going away.”
Hoene also said that there are provisions in the bill that target higher education, and that could take away deductions from colleges and universities.
Many freelancer workers or small business owners who work from home can currently deduct certain items that they use for work (a computer, Internet, a workspace, etc), but that could also change under this bill.
“Some of those deductions will be going away if this passes,” Hoene said.
The almond industry may see a change as well.
“What’s happening for the almond industry is that a particular piece of the tax structure that has benefited them will actually be changed in a way that they would be paying higher taxes going forward,” Hoene explained.
So what is good for Californians in the bill?
According to Hoene, the bill would increase the Child Tax Credit, so some parents who make over a certain income will see their tax credit go up.