Residents of the Philadelphia region will pay more in taxes and get fewer community improvements if the Trump administration's tax bill passes. Yet, we've seen nothing like the outcry that successfully defeated the repeal of Obamacare. This lack of response is all the more shocking considering that the tax bill is a sneaky way to repeal Obamacare and, if passed, would increase insurance premiums. The Trump administration is hoping things stay quiet — that's why the bill was rushed through the Senate on the middle of a Friday night. Thankfully, though, it's not too late. I beg area residents to call their representatives today.
The bill passed by the Senate eliminates the personal deduction of income and sales taxes, while capping the deduction of property taxes at $10,000. Let me put it more simply: This bill will increase the tax burden on Philadelphia residents, as well as individuals who reside in the suburbs and work in Philadelphia. Approximately 30 percent of Philadelphia residents use this deduction, with an average savings of $3,400. These savings would be lost under the current Senate proposal.
This bill also eliminates the student loan deduction, the employer-provided child care credit, and the credit for expenditures for disabled individuals. To end all those credits and deductions for working people — people who are caring for a disabled adult or trying to advance their education, no less — while cutting taxes dramatically for corporations, is unconscionable. This is a slap in the face to middle-class Philadelphians and all working families.
Unfortunately, the problems don't stop there. Philadelphians are likely to see higher insurance premiums if the Senate is successful in repealing the individual mandate. Make no mistake, this would be the equivalent of repealing Obamacare altogether. The mandate, while unpopular, is the linchpin that protects all of the other things we like about Obamacare. Don't believe the argument that breaking Obamacare will force House and Senate Republicans to fix it. They struggled on how to "repeal and replace" Obamacare for nearly a year and got nowhere. Making the program worse won't make finding a consensus any easier.
In addition to raising insurance premiums and our sales, income, and property tax burdens, this bill would also cost Philadelphians jobs. In recent years, the New Market Tax Credit (NMTC) has created 1,500 permanent jobs in our city, but now that credit is on the chopping block. In Philadelphia, NMTC resources have been allocated to improve schools, community facilities, public health programs, and commercial corridors. Eliminating the credit would deprive worthy projects like these of more than $14 billion in financing over the next two years.
The same effect would occur if we cut the Historic Rehabilitation Tax Credit — fewer community improvements and fewer jobs. The HRTC helped revitalize more than 300 properties in Philadelphia, including vacant schools, warehouses, residential rental projects, factories, retail stores, apartments, hotels, and office buildings. Studies show that historic rehabilitation outperforms new construction in job creation and materials are more likely to be purchased locally. As a result, about 75 percent of the economic benefits of these projects remain in the communities. These are opportunities that would be lost under the Senate bill.
Finally, the proposal to eliminate the tax exemption on private activity bonds should deeply concern all local governments — big, small, Republican, Democrat. These bonds have helped construct or update our airports, transit systems, affordable housing, water infrastructure, and health and education facilities — all of which contribute to job growth, healthy local economies, safe communities, and the country's gross domestic product.
While President Trump has gleefully described this bill as an early Christmas present, the reality is that it will cost jobs, increase our tax burden, raise insurance premiums, and result in fewer improvements in our communities. Only the rich can expect to benefit from this — the rest of us are getting coal in our stockings. Call your representatives to stop this bill.