With a Senate tax reform bill taking shape, Republicans are moving closer to their goal of a major overhaul of the system. But Democrats and progressive advocacy groups say the GOP plan will hurt seniors and the poor, and deliver sweeping tax cuts for the wealthy and corporations.
Don Berry, a retired electrical worker from Sumner, says the GOP House tax bill is one of most divisive pieces of legislation he’s ever seen.
“In all the years, I’ve never seen such a blatant attempt to create a greater economic divide between the middle class and America’s wealthiest,” he says.
Berry, the Maine president for the Alliance for Retired Americans, a nonprofit labor group affiliated with the AFL-CIO, was among those who turned out a Bangor press conference to criticize GOP-backed tax plans that are making their way through congress.
Berry says the House version would eliminate $1 trillion from Medicaid. Sixty percent of that amount pays for long-term care for seniors who cannot afford private pay rates at nursing homes.
He says that provision has real implications for a state like Maine, where nearly 20 percent of residents are over the age of 65.
“Our seniors and our retirees don’t need added worry about their health care costs or their prescription drug costs,” Berry said. “Retirees’ shrinking fixed resources can only be stretched so far. Many are already cutting basic necessities. The House bill would cut $1.5 trillion, with nearly half of it going to the top 1 percent. This tax bill would be disaster for our seniors and our retirees and for the state of Maine and for this country.”
“I think we have come to see this as scare tactics,” says Republican state Rep. Stacey Guerin of Glenburn, who co-owns a restaurant supply company in Bangor.
Guerin says that by lowering the top marginal tax bracket for small businesses, the House GOP tax bill would provide huge benefits for about 99 percent of businesses in the state. She says she expects progressive leaning groups to skewer the Republican tax plan, but says they’re wrong to oppose it in the name of seniors.
“It is only to their advantage to pass tax reform to get more money into the economy, more people working who are paying taxes, who pay those benefits that support Social Security,” Guerin says. “And the senior citizens also are eligible for that $24,000 standard deduction for married individuals. They can see an increased savings there just like anybody if they are in that tax bracket.”
“I think that’s a fundamental misread of how this bill works,” says Garrett Martin, executive director of the progressive Maine Center for Economic Policy, a group squarely opposed to the GOP tax overhaul effort.
Martin says the business provisions in the House bill are geared toward big companies with larger workforces than a typical Maine small business.
“In fact what this bill will do is hurt a lot of small businesses, and it will hurt Maine’s workforce because the provisions that help reduce corporate tax rates and the rates they pay on foreign profits, in the past we’ve seen what it actually does is that it triggers them to offshore a lot of their workers in their workforce,” he says.
Supporters of the GOP plans say they would put more money into middle-class pockets through an increase in the standard deduction for individuals and married couples.
The House Republican tax reform bill passed largely along party lines two weeks ago. Meanwhile, an evolving Senate version of the tax legislation has received the support of the Senate Budget Committee and could be up for floor debate later this week.