Congressman Evans on Tax Reform and Children’s Healthcare

Rep. Dwight Evans and kids in school classroom.

Rep. Dwight Evans and kids.

Republican Tax Plan

Congressman Dwight Evans (PA-02) released the following statement after reviewing the latest Republican tax plan.

Our country has not seen bipartisan tax reform since 1986, and I believe we can all agree that the U.S. tax code is in need of a major facelift. Comprehensive tax reform must simplify our tax code, lower rates, and ensure a progressive tax code that helps move everyone in our neighborhoods forward, without simply picking winners and losers.

The Republican party seems to have forgotten one of the guiding principles of our democracy; as their new tax plan does absolutely nothing to ensure that our government is of the people, by the people and for the people. The GOP tax plan borrows trillions from future generations to give tax cuts to millionaires and billionaires at the expense of our Commonwealth’s children and working families. This is entirely unacceptable and not a plan that fits the needs of Philadelphians, Pennsylvanians and Americans. It is time for the Republican party to work across party lines in a deliberate and transparent manner to create a tax plan that listens to, speaks to, and hears the needs of hardworking Americans in our neighborhoods nationwide.

Children’s Health Insurance Program

Congressman Dwight Evans (PA-02) released the following statement in response to the vote on the House GOP CHIP-CHC Reauthorization bill, H.R. 3922; an incredibly, divisive partisan bill that allocates money to pay for the reauthorization of the Children’s Health Insurance Program (CHIP), Community Health Centers (CHCs), and other public health initiatives by cutting funding for both the Prevention and Public Health Fund and the Affordable Care Act (ACA), and raising Medicare premiums for seniors.

According to the most recent Kaiser Family Foundation’s State Health Facts, Pennsylvania’s current DSH allotment is $616.27 million. Cuts to the program will reduce payments by $121.03 million, a 19.6% reduction. Currently, we have more than 176,000 children enrolled in CHIP which will soon run out of money to pay for their care. In the Second District alone, there are 8,360 children who receive healthcare coverage through CHIP.

Let’s stop the games and get something done. We shouldn’t have to sacrifice the health and wellness of one population for another; and that is exactly what this divisive GOP bill does. The bill puts healthcare for our children, our families and our seniors at risk by pitting their needs against one another. Healthcare is not a choice, it is a right. The children in our Commonwealth who rely on CHIP for their basic healthcare needs deserve more than this foolish game of politics. We need to come together, roll up our sleeves and do the right thing. I will keep fighting until we get this done for our children.

The Republican controlled House and Senate failed to reauthorize the Children’s Health Insurance Program (CHIP) program which expired on September 30. Nationwide, nine million children rely on CHIP for affordable, reliable healthcare.

Congressman Evans voted “No” on the House GOP CHIP-CHC Reauthorization bill, H.R. 3922.

Congressman Dwight Evans (D PA-02) represents Northwest, West, North, parts of South and Center City Philadelphia, and the western suburbs of Narberth and Lower Merion Township. He serves on the House Agriculture Committee and House Small Business Committee. He is a Co-Chair of the Congressional Black Caucus (CBC) Economic Development and Wealth Creation Task Force.

 

EITC: A Tax Scam in Sheep’s Clothing

greedypersonIn 2001, the Pennsylvania legislature created the Educational Improvement Tax Credit Program (EITC) in order to encourage companies to donate money to private schools. This program – little known and even less understood – expanded over the years to the point where it has distorted an act of charitable generosity into a accounting trick stealing money from the public treasury and actually paying schools only a fraction of the money lost.

While Pennsylvania’s legislature is unable to agree on a budget, EITC has grown into a bonanza for those willing to game the tax system. Here is how it works: A profitable company or a group of high-income tax payers have a total annual income of $22 million. Normally, Pennsylvania would tax this income at a rate of 3.07%, yielding $675,000 per year to help fund all the needs of our commonwealth including the most underfunded public schools.

However, under this law, the company could commit itself (over the next two years) to “generously” donate $750,000 per year to their favorite education school or scholarship fund. They are then able to use 90% of the value of their donation (i.e. $675,000) as a credit against their obligations to support the needs of our tax. This completely offsets their state obligation!

If we stopped our calculations at this point it would be bad enough. The group or company would be taking $675,000 from the coffers of the state at a net cost of only $75,000 to themselves. This money wouldn’t necessarily go to meet the state’s educational priorities with a public school system plagued with crumbling infrastructure. Instead it would go to whatever elite private institution was lucky enough to have benefactors with such large tax bills which they need to offset, and the tax/legal-savvy to form the fictive corporations necessary to exploit this fiscal loophole.

Yes, we should give more money to schools, but money should go to schools according to their need, not according to the luck of the draw and the whims of the elite. This credit is only available to the wealthiest citizens and corporations. Accordingly, low-income Pennsylvanians pay the full 3.08% state income tax while their high-income counterparts can offset all or most of their tax obligation.

The government should strive to make the best use of its revenue. Call your State Representative and State Senator and tell them to end this insane system of Orwellian accounting which rewards self-interested manipulation in the name of so-called charity.

Full disclosure: I personally benefit from EITC with my donations to Jewish schools. While I oppose the concept, it is currently legal though capped at $75 million. I rationalize my participation in this program arguing that the money will go to an elite school to the benefit of some high-income taxpayer whether I participate or not, so why not me and the schools I support. Meanwhile, I am calling for an end to EITC in Pennsylvania.