Taxes

The GOP’s Tax Cut Bill Would Eliminate Deductions for Disasters

JM Ashby
Written by JM Ashby

Congress just recently passed a bill to expand deductions for the victims of Hurricanes Harvey, Irma, and Maria, but the "tax reform" framework they released last weeks calls for completely eliminating those deductions.

The nine-page tax overhaul framework released by Republicans last Wednesday lacks many details about how to pay for promised tax cuts, but it does say that just two of the itemized deductions in the current tax code would remain: charitable contributions and home mortgage interest.

It says nothing about retaining the theft and casualty deduction for uninsured economic losses from events such as fire, flood, hurricane or tornado. Asked specifically whether the deduction would be retained, Brady's office said only that Ways and Means Committee members continue to work on the treatment of specific deductions.

Now, it's likely this particular deduction will survive and not including it in their grand plan was merely an oversight, but if that's the case it says a lot.

The GOP's package of tax cuts for the rich did not go into a great deal of detail about how the plan would be paid for, it simply called for eliminating loopholes and deductions in the most vague manner possible. It didn't go into detail because their final bill probably won't close or eliminate many (if any) loopholes or deductions.

House Republicans and members of Trump's cabinet have already signaled that deductions for state and local taxes will likely survive and that is the biggest pay-for included in their proposal. If they're willing to back down on that, I expect most other deductions will follow.

Meanwhile...

A brief reminder that the GOP's plan to pass a bill through reconciliation means just 3 out of 52 Republicans are enough to kill it.

"The Republican tax break proposal is one giant contradiction," said Rep. Lloyd Doggett, D-Texas. "It takes away disaster relief expanded last week, eliminates the medical expense deduction, which was expanded in their failed Obamacare attack, and claims middle class tax relief, while overwhelmingly showering individual tax benefits to the top 1%."

Purely deficit-financed tax cuts that aren't paid for is still the most likely outcome.

  • fry1laurie

    Republican timing is, as always, spot on.

  • Dread_Pirate_Mathius

    The proposed tax bill would absolutely FUCK me. I live in a high tax state (NY) and a high tax town (none of your business) and I have a mortgage.

    I don’t expect anyone to weep crocodile tears over my situation, but I’m not quite a 1%-er. So while they’re giving themselves enormous cuts, and the poor don’t really have much more to give, it’s going to be my economic tier that gets devastated. My bills are liable to go up by 10k+.

    Now, maybe, I could see my way through to paying that extra tax. There are those who need it more than I do. And I’m ok with that. That’s my obligation as a member of civilized society to help those less fortunate. But I’ll be damned if I’ll be alright with jacking up my taxes immensely while dropping them for the rich.

    • I’m in a similar situation…I will get screwed, royally.

      • Draxiar

        Same here.

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