Source: JGI/Jamie Grill / Getty
In 2011, the public policy organization, Demos, published a report titled “The State Of Young America: Facts & Statistics On Young African Americans.” The report highlights that over half of all young African Americans believed their finances were in poor shape. That belief is backed up by a few startling facts, which likely aren’t as startling to Black people, like the finding that 1 out of 4 African American women and 1 out of 3 African American men ages 18-24 are unemployed.
The report goes on to note that when employed, African Americans are only compensated 75 cents for every dollar compared to our white counterparts. Related, over 40% of millennials of color are spending too much income on rent, which has the potential to keep Black younger people from saving, investing and taking care of other essential needs in our lives like healthcare. Millions of people under 30 are without health insurance. These factors make stomaching the GOP Tax Plan that much more exhausting. But how might Black millennials be impacted?
Income
The majority of Black millennials, included in the 53 percent of Americans who are employed, will see larger paychecks as early as February, but don’t get excited. The total plan will cost the country $1.5 trillion. That amount will be tacked on to the national debt in which all Americans will be responsible for paying while large corporations continue to enjoy the benefit of huge tax cuts.
Also, not all tax breaks for the average person in the U.S. (those making less than $75,000) will expire in 2025. As a result, most reputable analysts expect an exuberant tax increase ($83 billion) in the years to come. Not only will we soon experience a tax increase, but employers will no longer be able to deduct for transportation costs like public transportation and parking. These are costs that will likely be placed in the laps of most workers. So do not spend, what may seem to be, more coins in one place. Save.
Housing Costs
So many millennials have either stayed in or moved to big cities, especially in states like California and New York. If that’s you, expect your rent to increase. At present, homeowners can make as many deductions as possible from their state and local taxes. The GOP Tax Bill will cap that deduction at $10,000, resulting in a higher tax burden for homeowners. Property tax is an expense landlords pass on to renters, so expect higher than normal rents in the future. Homeowners in New York, New Jersey, and California can also expect the value of their homes to decrease as much as 10% because of the new tax bill in what many see as a form of direct economic punishment targeting democratic voters.
Obtain and visit an accountant. Take time to discuss how you can protect your property and or manage any increases in funds you recieve from temporary tax cuts to balance increased housing and transportation costs funds you may incur.
As we continue to survive and create solutions in this virulent political environment. our success will be dependent on our ability to monitor the the tools being used to destabilize our communities.
Healthcare
The new tax bill does not explicitly kill Obamacare but the public should expect a direct destabilization of Obama’s crowning achievement. The tax bill removes the mandate (or tax) on uninsured Americans. An estimated 13 million people who do not have insurance. Republicans are betting that people will make the chose to forego healthcare coverage relinquishing the federal government of providing subsidies to help pay for corporate tax relief. The removal of the mandate also effectively increases costs for states, companies and premiums of individuals.
The decision to obtain or maintain insurance is very personal. I’d suggest if you have found insurance don’t drop it simply because the mandate has been removed.
Business
Traditionally, Republicans have prided themselves on being the party of business. In celebration of the Bill’s passage, Congressional Speaker Paul Ryan stated, “When House Republicans began this journey, we had two goals in mind. We believed Americans deserved a tax code bill of growth. We believed America could leapfrog back to the lead of the pack as a best place on the planet for the next new jobs and next new business. Today, we achieved those goals.”
An effort to push the bill on the American people is culminated in this dizzying “fair and simple” website. The most radical aspect of the bill shaves the corporate tax rate to nearly 20 percent. Also, many small businesses and entrepreneurs will be able to take advantage of pass throughs, meaning if you own a business you can take advantage of revenue made after paying salaries.
For example, the plan allows for a 20 percent income deduction for businesses filed as sole proprietors; however, the design of the tax formula eliminates the value for many entrepreneurs and small business owners that don’t own valuable property. Meanwhile the The Joint Committee on Taxation outlines that by 2027 the bill raise taxes on individuals by $83 billion while also enabling large corporations a $49.4 billion tax cut.
Remember The Devil in the Details
As we continue to survive and create solutions in this virulent political environment. our success will be dependent on our ability to monitor the the tools being used to destabilize our communities. In response, we have to create sustainable tactics that will ensure equity for young people of color in our communities.
This might look like having deep conversations with our loved ones on how to shield ourselves from the tax burden Republican lawmakers have burdened us with. It might require we make different decisions for longterm gain and not just short term wins. It might mean working to ensure our elected officials know, through our civic engagement, that we are outraged that the government expects us to pay for corporate profits—profits that we will contribute to through our spending and labor, but will not see an equitable return on.
Bryan Epps, a Newark native, is an innovative community and institution builder.
