Senate Tax Bill Makes It More Expensive to Go to Work

Yesterday, the Senate Finance Committee began marking up its version of the “Tax Cuts and Jobs Act.” Like the version approved by the House Ways and Means Committee last week, scheduled for a floor vote in the House later this week, the Senate bill would make women and families pay for tax cuts for millionaires, billionaires and corporations. For example, the Senate bill lowers the highest individual tax rate, expands the exemption for the estate tax, and slashes the corporate tax rate – which, combined, would lower taxes for the super rich and big corporations by trillions of dollars over the next decade.
At the same time, the Senate bills (like the House version) would eliminate tax benefits that ordinary working families rely on. One striking example: it eliminates some tax provisions that help workers defray the expenses they incur – to go to work.
The tax code, as it exists currently, reflects a policy decision to address some of the expenses that some workers face in order to work. The Child and Dependent Care Tax Credit and Dependent Care Assistance Plans help people with the child or dependent care expenses they pay to care for their loved ones while they are working. And under current law, workers who itemize deductions may deduct some “unreimbursed expenses attributable to the trade or business of being an employee,” as the Joint Committee on Taxation poetically puts it on page 28 of its description of the Senate bill. These include some common expenses that many professionals pay out of pocket:  liability insurance premiums, depreciation on computers used for work, home office expenses, job search expenses, or work-related education.  And they include some expenses that particularly hit people working in blue-collar jobs, like tools and supplies, union dues, and work uniforms.
In addition, the Senate bill eliminates tax benefits for work-related moving expenses (except for some members of the military), and removes tax incentives for employers to offer certain transportation benefits to their employees.
Now, many workers don’t take these deductions – whether because they don’t itemize their deductions or because the deduction isn’t large enough (for example, the deductions for unreimbursed expenses must total at least 2 percent of the tax filer’s gross income). But many families do. For these families, tax provisions like these acknowledge that they pay out of pocket for the privilege of earning their living – and help offset those costs.
In a bill that is touted as lowering taxes on working families, denying a tax deduction for nurses’ scrubs or expenses for vehicles for rural mail carriers seems particularly wrong-headed.  Especially when you consider what this tax bill will be worth to working families: Consider that in 2019, the average tax cut for a family earning $100,000 is estimated to be $950, while the average tax cut for the richest 1 percent is estimated to be over $34,000.  And consider that, in the future, Republicans will seek to offset the costs of these enormous tax cuts by slashing programs that are essential to the well-being of women and working families.  We deserve better.