Today, Congress passed its tax reform legislation, The Tax Reform and Jobs Act, and it has been sent to the President to consider. The legislation achieves some laudable things, like doubling the standard deduction, which will help many struggling families avoid tax liability, expanding the use of 529 education plans, and increasing the child tax credit.
However, the Act contains a number of problematic provisions that will have dramatic negative consequences, particularly for those most in need. Among other things, the Joint Committee on Taxation indicates that the bill will eventually raise taxes on those with lower incomes while simultaneously cutting taxes for the wealthy. This is clearly problematic, especially for the poor. The repeal of the personal exemption will cause larger families, including many in the middle class, to be financially worse off. The final bill creates a large deficit that, as early as next year, will be used as a basis to cut programs that help the poor and vulnerable toward stability. The legislation is also likely to produce up to a $13 billion drop in annual charitable giving to nonprofits that are relied upon to help those struggling on the margins. This will also significantly diminish the role of civil society in promoting the common good.