(Victoria Seaman)This presidential election will have a profound impact on the future of Nevada. We will either enjoy four more years of prosperity, or endure a return to the economic hardship that prevailed during the Obama-Biden administration.
All of President Trump’s policies are on the line on Election Day — but while Joe Biden has dodged some issues, such as the Green New Deal, and adamantly refused to give answers on others, such as whether he would pack the Supreme Court, one thing he has been relatively clear about — at least until recently — was his intention to repeal “Trump’s tax cuts” on “day one” of his presidency.
Although Biden has recently begun to temper his rhetoric after belatedly realizing that the Tax Cuts & Jobs Act (TCJA) is actually enormously beneficial for middle-income Americans, his last-minute waffling is directly at odds with the fundamental nature of his tax-and-spend agenda.
Here are five of the most important benefits that Nevada taxpayers will lose if Biden succeeds in his goal of eliminating “Trump’s tax cuts”:
- Thousands of dollars in federal tax cuts
Nevada taxpayers are saving an average of $1,341 on their federal income taxes every year thanks to the TCJA. Without even factoring in wage growth or other changes in economic conditions, that amounts to a whopping $5,364 over the next four years.
Contrary to Biden’s misleading rhetoric about tax cuts for “the wealthy,” the TCJA reduced tax rates for every income bracket. It also doubled the standard deduction — a cost-saving tool that benefits millions of middle-income Americans, but which high earners rarely use because they can save more money by itemizing their deductions to take advantage of myriad loopholes in the tax code.
- The Obamacare tax cut
Obamacare notoriously punished thousands of Nevada households with a hefty penalty for going without health insurance. Nearly 55,000 Nevadans were forced to pay the individual mandate penalty in 2016, and a whopping 77 percent of them were from middle- and low-income households earning less than $50,000 a year.
The TCJA eliminated this unfair burden on working Americans, but Biden wants to bring it back. Throughout his campaign, Biden has lauded the dysfunctional healthcare reforms that Democrats rammed through Congress when he was vice president, promising that his administration would “build” on the “progress” made by Obamacare.
- Incentives for local economic development
The Opportunity Zones initiative — one of the most significant, yet overlooked elements of the TCJA would also be on Biden’s chopping block. In 2018, a total of 61 low-income communities in Nevada were designated as Qualified Opportunity Zones — meaning that they are eligible for special economic incentives to promote growth and development in economically distressed communities that have long been forgotten or ignored by the federal government.
The investments that flow into Opportunity Zones as a result of the incentives created by the TCJA will fund transformative projects such as affordable housing, improved infrastructure, and business development that will create new job opportunities for local residents.
- Protection from the unfair SALT deduction penalty
Nevada is one of the few states in America that does not levy a state income tax. This is great for Nevadans overall, but it also means that Nevada taxpayers effectively subsidize states with high tax rates through what is called the State and Local Tax (SALT) deduction. Before President Trump signed the TCJA, residents of states such as California and New York could deduct the full value of their state and local taxes from their federal tax liability — an especially valuable loophole for the highest earners. This insulated those taxpayers from the true consequences of sky-high state income taxes and deprived the federal government of significant amounts of revenue, which shifted the burden of federal taxes onto the backs of taxpayers in low-tax states such as Nevada.
The TCJA capped these deductions at a still-generous $10,000 per year, and limited how the deduction could be claimed. Democrats such as New York Governor Andrew Cuomo have been screaming bloody murder ever since, demonstrating just how much the unlimited SALT deduction skewed the tax code in favor of high-tax states.
- $1,000 child tax credit
The TCJA also doubled the child tax credit, from $1,000 to $2,000. As of 2018, there were nearly 800,000 Nevada children aged 19 and under — meaning that the increased child tax credit will put hundreds of millions of dollars back into the hands of Nevada families.
The child tax credit is another example of how the TCJA was specifically tailored to benefit lower- and middle-income families. While working families can claim the full value of the credit, it is phased out for higher earners, starting at $110,000 in annual income for joint filers and $75,000 for single taxpayers.
Joe Biden’s vindictive crusade to eliminate “Trump’s tax cuts” on “day one” of his hypothetical presidency would have devastating, long-term consequences for taxpayers across the Silver State — and not just the “wealthy” ones.
Victoria Seaman is a wife, mother, businesswoman, Nevada Councilwoman and former Nevada assemblywoman.