Thursday, April 25, 2019

TRUMP TAX LAW SCREWS GOLD STAR FAMILIES

CNN reports:
President Donald Trump's tax overhaul is forcing some military families to pay thousands of dollars more in taxes on their survivor benefits....

Spouses who signed over their earned benefits to their children -- a move that is done in order to ensure the family of a deceased service member temporarily receives all their benefits -- saw an increase in taxes this year because the new tax law reclassified how children's assets are taxed, Tragedy Assistance Program for Survivors says.

In past years, Gold Star families who chose this option paid an average of 12% to 15% in taxes on that income. Following the tax reform laws that went into effect in 2018, that tax rate jumped to 37%, according to the nonprofit.
An example?
Theresa Jones has been a single mom to Anthony and Hunter for almost six years. Her husband Landon, a Navy chopper pilot, died in the Red Sea during Operation Enduring Freedom in 2013....

The boys each received about $15,000 in survivor benefits last year. Jones was hit with a tax bill of $5,400 for them, up from $1,100 from the previous year.

"That's how they have a roof over their head. That's how they have food in their mouths. That's why the lights are on right now. That's how we survive every month," Jones said.
More, from Task & Purpose, an online publication focused on military issues:
Cheryl Lankford, whose husband U.S. Army Command Sgt. Maj. Jonathan Lankford, Sr. died in Iraq on Sept. 22, 2007, told Task & Purpose that she saw her taxes for her 14-year-old son's survivor benefits increase from roughly $100 and $200 dollars per year to about $2,500 this year.

"I heard rumors that this year we were gonna be paying a little bit more, especially after the news broke that the taxes have changed and there may be a bit of an increase," Lankford told Task & Purpose. "I had no idea it would be quite that much money. That was a shocker for me"

It was the same for Jessica Braden-Rogers. For the last seven years since her husband, Army Capt. Michael Braden, died on April 18, 2012 while deployed to Afghanistan, Braden-Rogers has paid roughly $1,100 in taxes for her son's benefits. This year she said it jumped to $4,600.

"None of us knew any of this until we all started filing our taxes and had such a significant increase in our tax burden," said Braden-Rogers.... "We've always had a tax burden, but for me, quadrupling the tax burden of a Gold Star child is completely unfair. It's cruel. I mean why would you tax a nine year old?"
Why is this happening?
Previously, survivors benefits that were allocated to the children of a fallen service member were taxed at the parent's rate. Under the new tax code, those benefits are instead treated the same as a trust or estate, which means they can be taxed at a rate as high as 37%, and that threshold is reached faster than it was before.
That's preposterous -- and 37%? Hedge fund billionaires get to call their income "carried interest," and it's taxed at 23.8%.

There are bills in the House and Senate to solve this problem, and each bill is sponsored by a majority of the members in that chamber, so maybe this is a temporary problem. But it should never have happened. Once again, here's something that would have been a massive national scandal driven by the right-wing media if it had taken place in the Obama years. But it happened because of Trump's tax bill, so ¯\_(ツ)_/¯.

No comments:

Post a Comment