And now for the question of the hour: What’s in it for me?
The answer is that if the Tax Cuts and Jobs Act of 2017 had been in effect last year, my wife and I would have saved more than a thousand dollars in federal income taxes, according to MarketWatch’s tax calculator.
That is what’s in it for me, and that’s where the political debate is as Congress sends its completed tax bill to President Donald Trump. Congressional Republicans are counting on the relatively small boost in after-tax income that most middle-class people would get in 2018 to overcome what polls show the public already knows: the bill shifts the tax burden downward, to the benefit of the GOP’s wealthiest donors.
The GOP pitch is not “America First,” because if it were, there would be glimmering talk of sacrifice for the national good. No: It’s “Me First.” And beyond the “what’s-in-it-for-me” talking points we are hearing—Democrats exaggerate also, in their case by overstating the proportion of middle-class people who’d pay more in taxes—there are some ominous provisions in the tax bill that will undermine what Republicans used to call the “safety net.”
The tax cut will not only limit government’s ability to help those in need, but also hamper the vital work that nonprofits do. It’s a one-two punch to the common good.
With fewer people itemizing their taxes, the National Council of Nonprofits forecasts an annual loss of $13 billion a year in charitable donations. Another $4 billion a year would be lost by doubling the estate-tax exemption to about $11 million for individuals and $22 million for couples. That’s because the change would hamper efforts to woo major donors through estate planning. The council expects that these losses would eliminate 220,000 to 264,000 nonprofit jobs.
According to Tim Delaney, president of the National Council of Nonprofits, Congress’s message to charities is “We don’t care—you’re on your own.”
This comes at a time when nonprofits will be needed to take up the slack resulting from the next step of Republican tax reform: spending cuts in health services and other areas. Cuts to the Medicaid program will undermine hospitals that serve the poor. Further destabilizing the healthcare system, the 2019 elimination of the tax penalty for not buying health insurance will lead to higher premiums, according to the American Academy of Actuaries.
“The bill will increase demands for nonprofit services by blowing a deeper hole in the federal deficit, which then will be used to ‘justify’ spending cuts to programs on which the public depends,” Delaney said in a statement. “Simultaneously, it will block resources nonprofits need to address existing and growing demands for services.”