The Senate version of the tax bill, S. 1, the Tax Cuts and Jobs Act passed in the Senate in the early hours of Saturday, Dec 2 by a vote of 51-49 and now the U.S. House of Representatives and the U.S Senate have to agree on a combined version of the two bills.
That means we have another chance to make sure Congress hears us before this bill becomes law. There is still time to stop tax bill provisions that may harm people with disabilities! Don’t let Congress cut our services and programs.
We don’t know what the final bill will look like but everything from both the House AND Senate versions is on the table:
Tax cuts open the door for cuts to Medicaid, Medicare, Supplemental Security Income, and other services.
While neither the House nor Senate tax bill includes direct cuts to these services, cuts are expected to follow to pay for the $1.5 trillion added to the deficit due to the tax cuts included in these tax proposals. Medicaid and other disability services were the target of intense cuts over the summer through the various Affordable Care Act (ACA) bills proposed in the House and Senate. There is no doubt that these same services remain on the chopping block to help pay for the proposed tax cuts.
Repealing the “affordable” part of the Affordable Care Act.
Eliminating the individual mandate means 13 million people could lose health insurance, and premiums will increase by 10% on average. The Senate proposal eliminates the individual mandate. It is not addressed in the House.
The individual mandate helps make health insurance affordable for everyone. Without it insurance premiums would rise by 10%, which amounts to an increase of hundreds of dollars per year for nearly 7 million middle-income Americans and by over $1,000 per year for seniors, according to the Center on Budget and Policy Priorities (CBPP).
Eliminating the medical expense deduction for people with disabilities.
The House bill eliminates the deduction for out-of-pocket medical expenses exceeding 10% of a person’s income, making it even harder for people with disabilities to cover medical bills. The Senate retains medical expense deduction options.
If the medical deduction were eliminated, this would hurt people with disabilities and chronic medical conditions, older citizens with greater medical needs, and families with children who have congenital or genetic disorders. Almost 8.8 million households claimed the medical deduction in 2015. The average deduction claimed was close to $10,000 and the cost of deducting long-term care could be ten times that amount. If individuals with disabilities can’t deduct their medical expenses, many will likely need to draw down more resources from tax-deferred accounts. Distribution from this type of account is considered income. The more income reported, the more an individual’s Social Security benefit could be taxed.
Incentives for hiring persons with a disability called the Work Opportunity Tax Credit (WOTC).
The WOTC provides businesses with a federal tax credit for hiring people with disabilities, as well as others, including unemployed veterans. The current tax credit for hiring a person with a disability can be as high as $2,400 for a business. The House proposal eliminates this provision. It is not addressed in the Senate.
Dependent Care Assistance Programs (DCAPs).
DCAPs are tax-favored arrangements by which an employer reimburses employees for dependent care expenses, make payments to third parties for care of employees’ dependents, or provide a dependent care facility for employees. These programs are slated to expire December 2022 in the House bill, not addressed in the Senate bill.