CURRENT REPUBLICAN TAX REFORM PROPOSAL

WHEREAS, a healthy and vibrant economy depends upon a federal tax system that raises sufficient revenue to adequately provide for the safety, security and well-being of Americans, including the education, healthcare, infrastructure and social safety net that gives Americans the opportunities they want and deserve; and

WHEREAS, the new proposals advanced by President Trump and a Republican-led Congress would actually make the tax code less equitable and provide less revenue for the safety, security and well-being of most Americans; indeed, the proposals would enact tax “reform” in which 80 percent of the benefits would go to the top 1 percent of earners; and

WHEREAS, the new proposals eliminate the state and local tax deduction, which allows Americans to deduct from their federal taxes the amount they pay in taxes to their states and localities; this deduction has been a staple of the tax code for more than a century and is used by 44 million taxpayers in all 50 states; and

WHEREAS, the elimination or capping of the state and local tax deduction puts at risk funding for state and local services, including public safety, education and emergency operations, as well as funding for long-term infrastructure projects; and

WHEREAS, according to the Congressional Budget Office, the new proposals will increase the federal debt by $10 trillion over the next decade. By 2027, the deficit could reach $1.4 trillion, or 5 percent of the economy; and

WHEREAS, the new proposals enshrine a loophole that lets hedge fund billionaires pay a lower tax rate than their secretaries, further rigging the economy in favor of the wealthy; and

WHEREAS, the new proposals includes a 25 percent tax on “pass-through” businesses, where corporate income "passes through" the business to the owner, who is then taxed at the individual tax rate. The pass-through tax is used more and more by top earners to circumvent a higher personal rate, benefiting those in the top tax bracket; and

WHEREAS, as the recent healthcare and budget fights make clear, Americans stand to lose vital services such as funding to federal student aid, nutrition assistance, Medicaid and other important programs:

RESOLVED, the American Federation of Teachers will encourage tax reform that improves working people’s lives, makes the tax system fairer, and protects adequate revenues for necessary government responsibilities; and we will do so in the same way we did with healthcare—by working in coalition with community partners and communicating our values to our members, lawmakers and the public; and

RESOLVED, the AFT commits to fighting for the middle and working class and their families by ensuring that sorely needed revenue for investments in education, infrastructure and the like is prioritized; and

RESOLVED, that the AFT will fight for comprehensive tax reform that ensures that:

• The richest Americans, large corporations and Wall Street pay their fair share of taxes;
• Tax cuts must not be paid for by cuts to Medicare, Medicaid, education and other vital programs; and
• The state and local tax deduction is retained so that public services are supported; and

RESOLVED, the AFT recommits itself to fighting for high-quality public services—paid for collectively and fairly through taxes—that benefit families, strengthen communities, ensure safety and bolster the economy.