Last-minute holiday shoppers call tax reform worrisome, misleading

Monitor staff
Saturday, December 23, 2017

With a massive tax overhaul signed into law Friday by President Donald Trump, Republicans have promised to kick the economy into high gear. But harried holiday shoppers making last-minute purchases in downtown Concord said they were skeptical about whether the plan would do much for them.

Adam Goodwin is a Concord resident and the owner of a painting and snow removal business. Sitting at the Concord Co-op on Saturday, he said he still wasn’t sure how the tax overhaul would impact his personal finances, but said he wasn’t optimistic.

“I’m worried about the health care,” Goodwin said.

The legislation does away with the individual mandate, a key Obamacare rule that penalized people for not buying insurance. Architects of the law included it to make young, healthy people buy insurance in order to help subsidize older and sicker consumers. It’s always been one of the ACA’s least popular facets – but key to the stability of the health exchanges.

Trump himself commented the move “essentially” repealed the Affordable Care Act. Experts have said they expect premiums to rise and further destabilization in the health care exchanges. The Congressional Budget Office has projected 13 million more will be uninsured by 2027.

Over at Gibson’s book store, Megan De Vorsey, an attorney, said she wasn’t sure yet how the bill would impact her – but wasn’t counting on a long-term benefit. The new tax plan is expected to deliver savings to most in the middle class in its early years, but most changes for individual filers end in 2025.

“Any so-called tax savings for the middle class will expire. Whereas the tax savings corporations, wealthier individuals – especially for corporations – have no expiration date,” De Vorsey said.

Her mother, Rosalyn De Vorsey, who was visiting from Athens, Ga., for the holidays, chimed in.

“To pay for their tax breaks, they’re going to raid Social Security and Medicare,” she said. “We’re okay. But the poor and the people who have no health care are really going to suffer.”

Beatrice Murphy, a retired businesswoman, said she expected to save some money next year from the tax plan. But she said she resented the larger – and permanent – benefits being bestowed on the much wealthier.

“I don’t like the fact that corporations and people with money are getting such a break. And for us it’s limited – and for them it’s not,” she said.

Pat Colander, who lives in Gary, Ind., but was visiting her son in New Hampshire, also said she worried about social safety net programs.

“I don’t think it’s going to impact us very much. I have my own business, and I teach and do other things. What I’m more concerned about is cuts to Medicare and Medicaid to pay for the cut,” she said.

The $1.5 trillion dollar tax plan doesn’t actually cut entitlement programs. But GOP leaders – including Trump and House Speaker Paul Ryan – have all said they’ll next look to welfare programs in an effort to cut spending.

Still, Colander, who teaches part-time at Purdue University, said she was glad certain parts of the bill’s first drafts didn’t make it in to the final version.

One iteration of the tax plan, for example, at one point envisioned counting as taxable income the tuition waivers schools gave to graduate students who worked as researchers or teaching assistants. Graduate student stipends – what schools actually pay students – typically range from $20,000 to $30,000. Tuition waivers – money students simply don’t pay to a school, can be worth upwards of $50,000. The proposal was protested by universities and graduate students across the country.

“I’m glad that that graduate school thing did not go through,” Colander said.