On the floor of Congress today congressman Brian Higgins had this to say about the Republican tax plan:
“The Tax Policy Center, the Wharton School, and virtually every rational economist have reviewed the House Republican tax cut plan and the results are clear: no new good economic growth, big debt and deficit, and big tax cuts for corporations and very rich Americans.
“Three million wealthy Americans will get a tax cut next year of $220,000. Two-hundred and fifty million not rich Americans will get a tax cut of $221.
“Where are all the deficit hawks? Where are any of the deficit hawks?
“This tax plan is nothing more than fraud being perpetrated against middle America. I ask my colleagues to reject this plan.”
Regarding the economy of Western New York, Higgins was specific:
“The Buffalo-Niagara region is in the early stages of a renaissance but to see real economic gains the progress we are beginning to see must be sustained. Elimination of the Historic and New Markets Tax Credits would deliver a devastating blow to Western New York, halting projects currently underway, and preventing future investments, that can revive our economy and create local jobs, from ever getting off the ground. It really can’t be understated how damaging this would be for our community. At the same time college students, individuals with disabilities, promising medical research, and families with large medical expenses are under attack while the rich get richer.”
Higgins outlined the local impact:
State and Local Property & Sales Tax Deduction
- GOP Tax Bill: Ends the deduction for state income taxes, caps property tax deduction at $10,000 and mortgage interest deduction for loans less than $500,000
- WNY Impact: SALT dedication has been in place since 1913 and was claimed by over 125,000 households in Erie County
Historic Tax Credit (Sec. 3403)
- GOP Tax Bill: Repeals the historic rehabilitation credit
- WNY Impact: Historic Tax Credits were used to rehab nearly 70 landmarks in the Buffalo-Niagara region representing investments totaling over $468 million. Many project will be too large to take on without the federal credit. Elimination of the federal credit will also eliminate the NYS Historic Tax Credit.
New Markets Tax Credit (Sec. 3406)
- GOP Tax Bill: Eliminates New Markets Tax Credit
- WNY Impact: The New Markets Tax Credit program provides tax credits for investments in low-income communities. New Markets investments have leveraged over $180 million for projects in WNY including: Roswell Park’s Clinical Sciences Center, the Electric Tower, Oak School Lofts, Ellicott Commons, Webb Lofts, Asbury Hall, AM&A’s Warehouse Lofts and the Innovation Center.
Medical Expense Deduction (Sec. 1308)
- GOP Tax Bill: Repeals the provision allowing for a deduction for out-of-pocket medical expenses. Under current law this deduction is allowed only for those whose medical expenses exceed 10 percent of the taxpayers adjusted gross income.
- WNY Impact: People with very high medical expenses will be burdened further.
Adoption Deduction (Sec. 1102)
- GOP Tax Bill: Ends program that allows employer contributions toward qualified adoption expenses to be excluded from the employee income.
- WNY Impact: Under current tax law, employer assistance for adoption expenses up to $13,570 are not counted as income. Beginning in 2018 employer assistance for adoption will count toward household income.
Providing Access to Individuals with Disabilities (Sec. 3407)
- GOP Tax Bill: Repeals the credit for expenditures to provide access to individuals with disabilities effective 2018.
- WNY Impact: Under current tax law, small businesses may claim a tax credit between $250 – $10,250 for providing access to individuals with disabilities.
Education (Sec. 1204)
- GOP Tax Bill: Repeals the deduction for interest on education loans and the deduction for qualified tuition and related expenses effective 2018. Cuts $65.5 billion in tax breaks for college and graduate school expenses, increasing the cost of a four-year degree by about $1284 for the average family.
- WNY Impact: Under current law students may deduct up to $2,500 interest on qualified education loans, and deduct between $2,000 and $4,000 for tuition and related education expenses. Under this plan, paying for higher education will be more difficult.
Promising Medical Research (Sec. 3401)
- GOP Tax Bill: Repeals the credit for clinical testing expenses for drugs for rare diseases or conditions
- WNY Impact: Makes medical research more expensive and slows the pace of promising discoveries. Impacts patients desperately hoping for better treatments and cures and impacts facilities on the Buffalo Niagara Medical Campus conducting clinical trials.
Work Opportunity Tax Credit (Sec. 3404)
- GOP Tax Bill: Repeals the Work Opportunity Tax Credit
- WNY Impact: The Work Opportunity Tax Credit provides employers with credit for hiring veterans, summer youth employment, individuals from low-income communities and individuals with disabilities.
Solar Tax Credit (Sec. 3502)
- GOP Tax Bill: The Solar Tax Credit expires in 2022
- WNY Impact: The Solar Tax Credit (Investment Tax Credit – ITC) allows residential and commercial consumers to deduct 30% of the cost of solar energy systems from federal tax credits. In addition to impacting homowners, this could significantly impact Solar City.
Electric Vehicle Tax Credit (Sec. 1102)
- GOP Tax Bill: repeals the $7,500 per electric vehicle tax credit to purchasers of electric vehicles
- WNY Impact: Makes the purchase of an electric vehicle less cost effective for consumers.
House of Representative Republicans are pushing for swift consideration of the bill, with Ways and Means Committee hearings scheduled for next week and the President pushing for approval before Thanksgiving.