Tax Cuts Spur Concerns About Deductions and Entitlements

February 03, 2018

Daily Journal
By Anna Schuessler

In an effort to inform Peninsula residents about the recently-passed GOP tax plan and field questions, U.S. Rep. Jackie Speier, D-San Mateo held a town hall Thursday, allaying concerns about how cuts to go into effect in next year’s tax season could affect returns and funding for social services.

Dozens of residents filled the College of San Mateo’s main theater with questions ranging from whether cuts would be made to entitlements like Medicare and Social Security now that the plan is in place to how changes in the corporate tax rate could affect employees and low-income residents.

Though Speier was joined by state Sen. Jerry Hill, D-San Mateo, Assemblyman Kevin Mullin, D-South San Francisco, and two tax professionals to address concerns about the new plan, she didn’t shy away from emphasizing the magnitude of the cuts included in it, which she said are expected to generate close to $2.3 trillion into the national debt over the next 10 years and heavily favor the wealthy taxpayers while cutting services for low-income earners.

“So who pays in the end for this little benefit that some of us are going to receive? … It’s our kids. It’s truly serious,” she said.

Topping the fears of many was whether the new plan signaled a reduction in Medicare and Social Security benefits, which Speier said had been next on the Republicans’ agenda when the plan was passed in December. But she said political pressure to maintain majorities in the House and Senate in the next election cycle caused congressional leaders to back away from a conversation about reducing entitlement benefits, and that Democrats would fight to prevent such a conversation from happening should it surface again.

“Part of my job is to be realistic and tell you what is likely and what is unlikely,” she said. “I don’t want you to worry about Social Security or Medicare.”

For others wondering how the changes would affect their refunds next year as well as local services they use, state legislation offered some hope. Acknowledging the new tax plan hit wealthier taxpayers in high-tax states, Hill said state legislators have been crafting bills aimed at softening its impact.

“That’s one area where the state and can do something about that to help Californians,” he said.