On Tuesday, the Board of Supervisors voted to direct their lobbyists in Washington, DC to oppose the Republican tax reform measures currently under consideration in the House and Senate. These plans would place an undue burden on residents of Los Angeles County, increase disparity nationwide by cutting the corporate tax rate from 35 to 20 percent, and hinder the abilities of state and local governments to provide vital services.
Of particular concern is the elimination of the State and Local Tax (SALT) Deduction. Currently, taxpayers who itemize can deduct state and local real estate and property taxes as well as either income or sale taxes from their federal tax bills. This deduction acts as a subsidy to state and local governments, allowing them to raise their taxes to fund critical programs, while not overburdening taxpayers. According to a Tax Policy Center Report, if the deduction were eliminated, California and New York would pay over 30 percent of the increase. Its elimination would result in double-taxation for California residents and would hinder local governments’ efforts to improve aging infrastructure and increase the supply of affordable housing.
Corporations, on the other hand, would see rate reductions under the GOP proposals while taxes would in fact increase for many middle-class Americans. In fact, the Senate proposal includes the repeal of the Affordable Care Act’s individual mandate in order to pay for these corporate tax cuts and to ensure that the cuts for wealthiest individuals are permanent. According to an LA Times article from September that outlines the GOP plan’s impact on Californians, the 4.6% reduction of the marginal tax rate for the highest earners to 35% and the elimination of the estate tax would provide targeted relief to the wealthiest residents of our state.
“This regressive tax cut for the ultra-wealthy, under the guise of ‘reform’ will be devastating for local government and lower-income residents who utilize County services. These residents, along with middle-class families, will shoulder the burden of this egregious redistribution of wealth to the top half of the richest 1%. This is the same old ‘Trickle Down Economics’ that has failed time and time again, except for the billionaires who already pay too little in taxes. Nothing trickles down, in fact, most people just get hosed,” said Supervisor Sheila Kuehl, who co-authored the motion with Supervisor Mark Ridley-Thomas