Millions of taxpayers trying to make today's extended income tax filing deadline are unlikely to be giving much thought to next year's taxes. But once they mail their returns and focus on the future, most won't like what they learn.
What is known so far about the plan to simplify federal taxes offered by Republicans in Congress is very simple: They want to suck more money out of the middle class while offering very little in return to soften the blow. The plan would cut the number of deductions, including one of the very few that middle-class families can use: the deduction for state and local taxes.
That break is especially beneficial to residents of high-tax states such as New Jersey. The non-partisan Tax Policy Center estimates that cutting the deduction would kick up filers' owed taxes by $2,350 nationally. In New Jersey, taxpayers would shell out $3,500 more yearly; in Pennsylvania, the cost would be an additional $2,180.
That shift would completely ignore the fact that New Jersey routinely pays more in federal taxes than it gets back. It also comes as many middle-class families in the Northeast are still in jeopardy of losing their homes, which is often their largest single investment.
New Jersey continues to lead the nation in mortgage foreclosures, ATOM Data Solutions reported last week. The state also includes the nation's two most distressed regional markets: Atlantic City and Trenton. The Philadelphia metropolitan area is the third most desperate nationally. This shouldn't be news to the Republicans in Congress who fought efforts to ease the mortgage crisis.
Congress should be shoring up the middle class, not kicking it down. More than four decades of rising expenses and wage stagnation has shrunk the middle class from 61 percent of the population in 1971 to 50 percent in 2014, according to a Pew research analysis.
At the same time, upper-income households saw their wealth grow from 29 percent of the national total to 49 percent. You can guess where it came from. Middle-income households have seen their share of national income plummet from 62 percent in the 1970s to 43 percent now.
Other than giving lip service to the middle class's plight at election time, few in Congress have offered substantive plans to help. Instead, the folks supposedly running the country want to make health care more expensive, and thus less available; won't address wage stagnation or retirement security; and cheered when a federal court in Texas blocked a rule that would have let employees earning up to $47,476 a year receive overtime pay if they work more than 40 hours a week.
Congress should be working to rein in health costs, protect Social Security, hitch productivity increases to wage growth, and help middle-class families pay for college or career training that actually results in good-paying jobs for their children.
Unfortunately, these items aren't high on the agendas of many members of Congress. Lawmakers are home for spring break, and a few have even had the courage to meet with their constituents. When they do, voters should ask them to provide specific details as to what they will do to help the middle class.