Guest Commentary: Closer look at GOP tax bill

Rebuttal of Duncan Hunter’s commentary on GOP tax bill:

All tied up with red, white, and blue bows, Congressman Duncan Hunter presented the GOP tax bill as great for America, but let’s take a closer look at how the current House bill is not so great for us in Ramona. Then let’s consider if Mr. Hunter is working in our best interests.

This bill will benefit corporate America and the wealthy. Taxes will potentially go up for many, if not most of us in Ramona, not down. Hunter’s assessments regarding household earnings don’t make sense, and he doesn’t account for the price of homes in our area and the proposed cap on mortgage deductions. Trickle-down economics doesn’t equate to job growth, but does make the rich richer. And let’s remember, there’s no “free lunch.” This bill will create such a huge deficit that Congress will have to look at siphoning off money from somewhere — Medicare? Social Security?

Essentially, the current GOP tax bill from the House is aimed at lowering corporate taxes, as well as eliminating the estate tax and other taxes that impact wealthy families. The tax rate on corporations will be reduced to 20 percent from 35 percent, allowing the country’s biggest companies to keep more of their profits. The NFIB, which represents small businesses, said it could not support the plan because the new rate favors businesses earning more than $250,000 over mom-and-pop shops like Java Hut. “This bill leaves too many small businesses behind,” according to NFIB President Juanita Duggan.

Under current tax law, single filers who make between $37,951 and $91,900 pay the 25 percent rate, but the plan would change the 25 percent tax bracket to cover single filers earning between $45,001 to $200,000. Americans who make between $91,901 and $200,000 would be pushed into the 25 percent tax bracket, instead of their current 28 percent or 33 percent bracket. While this is a benefit for households earning well over $100,000, most of us won’t see a tax shift and will pay more due to a lack of deductions.

Hunter touts tax savings by using a median household income for a family of four at a rate of $59,000. According to the most recent demographic information, the over 12,000 households in the San Diego Country Estates earn an average of $91,000 per year and most will see an increase in taxes when they lose their mortgage deductions.

A former director of the National Economic Council, Gene Sperling, claims, “There is no evidence to suggest this plan as a whole will be positive for middle-income workers and much to suggest that when this is complete, it will be a significant net negative.”

The idea of being able to complete a tax form that fits on a postcard means fewer deductions, as proposed in the current House bill:

• Homeowner deductions capped on home mortgages greater than $500,000.
• Deductions for state and property taxes would be capped at $10,000.
• Medical expenses
• Alimony
• Adoption costs
• Dependent care programs
• Medical savings accounts
• Moving expenses

William E. Brown, president of the National Association of Realtors is quoted as saying, “Eliminating or nullifying the tax incentives for homeownership puts home values and middle-class homeowners at risk, and from a cursory examination, and this legislation appears to do just that.”

Many of the people who take advantage of the deductions are the constituents of several Southern California Republicans. Republican representative for our neighboring District 49, Darrell Issa, is quoted as saying that he would vote against the bill because he’s concerned about an increase in taxes for many of his constituents.

Those who rely on affordable housing will be gravely impacted. According to Tia Boatman Patterson, executive director of the California Housing Finance Agency, “The newly released House Tax Reform bill would be catastrophic for affordable housing in California.” The tax bill would eliminate tax-exempt bonds which help subsidized the construction of 20,000 affordable homes statewide last year. Those affected will be seniors, disabled and those who were hardest hit by the housing crisis.

Assumptions that reducing taxes on big business means more jobs is purely speculation. Economists say there’s little relationship between post-tax profit rates and business investment that boosts productivity, while productivity and wages have grown faster in periods of higher taxes, according to the Economic Policy Institute.

Overall, the plan would add $1.5 trillion to the deficit over 10 years, according to the congressional Joint Committee on Taxation. Total tax cuts for individuals and businesses would reduce federal revenue by a combined total of $1.76 trillion over the decade. Where’s the money going to come from to keep our great country functioning?

We need to count on a Congressional representative who can give us the full, factual picture and how it will impact us, good and bad, here at home.

Susan Conrad is a Ramona resident.