- Millennials are vulnerable to changes in both the GOP Senate and House tax plans.
- This is, in part, because they tend to have lower incomes and are saddled with student loan debt.
- They’re also only just coming onto the home-buying scene, as the new plan removes a key benefit of owning a home in high cost (urban) areas.
- Plus, they will have to deal with the impact of this plan on future budgets. It will increase the deficit – and ultimately the national debt.
It’s time to stop trusting anyone over 40.
Both the GOP’s House and Senate tax plans contain measures that kick American millennials in the teeth, taking from their future to give to the richest Americans in the present.
From home ownership, to healthcare, to raising rates on lower income brackets, both these bills contain provisions that disproportionately target Americans born between 1981 and 1997.
Higher education is especially hard hit, according to an analysis by Young Invincibles, a lobby group for millennials.
“At a time when young adults and families are struggling more than ever to pay for higher education, they simply can’t afford to have more financial support eliminated by this tax plan,” said Reid Setzer, Young Invincibles’ director of government affairs.
“If lawmakers want to make our economy stronger, they should boost funding for higher education and target financial assistance to those who need it most, not drain programs that help train our workforce to pay for tax cuts for the wealthy.”
Millennials are especially vulnerable, in part, because their median income across the country is still pretty low. Data from 2014 shows that it ranges widely by state, from a low of $US18,000 per year in Montana to a high of just $US43,000 in the District of Columbia.
Then there’s the national budget deficit, which adds to our national debt and will have to be handled at some point in the future. The Senate bill will add almost $US1.5 trillion to the deficit by 2027.
Now, the GOP will tell you that these cuts will get paid for with economic growth. That’s utter nonsense. That ‘tax cuts trickle down’ myth has been disproven over and over again, and it especially won’t work now. As tax economist Martin Sullivan told Business Insider’s Bob Bryan, the Senate plan is “crazy” and “stupid” and in part because:
“Stimulus effects are likely to be minimal because the economy is already near full employment and the tax cuts are strongly tilted away from low-income households that would spend more than their well-off brethren. In addition, supply-side effects from lower marginal rates will be small because statutory rate cuts are small (or in some cases nonexistent).”
Besides, the GOP is using dynamic scoring in its budget projections. It essentially allows the government to estimate the future benefit of tax cuts to the economy after making a load of assumptions – including about what a future government might do in response to falling tax revenue. At best, it’s wishful thinking. At worst, it’s deception. Either way, it’s a form of generational theft. Just like both these tax plans.
But hey, you’re square if you have a private jet.Here’s a quick recap of the tax plan provisions that are going to hit millennials the hardest:
The House bill also takes a hammer to programs that help people pay for higher education.
- It eliminates $US65 billion in benefits for student loan borrowers.
- Does away with $US17.5 billion in higher education tax credits.
- And totally eliminates the student loan interest rate deduction, which is currently available for people making $US75,000 or less and helps 12 million Americans.
- It also taxes graduate student waivers, basically raising taxes on people for going to school.
It’s almost like the GOP has something against college.
Gee, I wonder what it could be…
Seems like something significant, but I can’t put my finger on it.
The Senate plan would also make health insurance premiums more expensive.
The plan removes Obamacare’s “individual mandate” provision, which requires everyone to buy health insurance. That’s what could trigger skyrocketing premiums.
And FYI, 36% of people enrolled in Obamacare are 34 years old or younger.
The House plan cuts the home-mortgage interest deduction in half, to $US500,000. That would make it harder for millennials in pricey areas to buy a home, according to experts.
“Eliminating or nullifying the tax incentives for homeownership puts home values and middle-class homeowners at risk, and from a cursory examination, this legislation appears to do just that,” William E. Brown, president of the National Association of Realtors (NAR), said in a statement.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.