More Charts: The Child Tax Credit and the End of the Medical Expenses Deduction

The Republican tax bill eliminates deductions for a bunch of odd things: tuition debt, mortgage interest, alimony, medical expenses, state and local taxes, gambling losses, tax prep expenses, moving expenses, and a few others. Several of these are obviously designed to punish blue states especially hard. I suppose the gambling thing is a sop to evangelicals. Alimony is…hard to figure out. Ditto for moving expenses and tax prep. None of these are going to raise much money, so I’m not sure what the point is.

But there are two sizeable ones worth looking at. The first one is the bill’s expansion of the child tax credit. Netted together with other changes, this benefits families with lots of children. Here’s where those families live:

No surprise: red states tend to have a higher percentage of children who will qualify for the tax credit. Once again, the tax bill is biased in favor of red states.

But then there’s medical expenses. This is a little tricky to figure out, but I wanted to test my intuition that this actually hurts red states more than blue states. The deduction for medical expenses helps families with big out-of-pocket costs as a percentage of their income, so I used Urban Institute data on average spending among those with the highest medical expenses. Note that “top 10%” refers to those with the highest medical expenses, not to well-off people in general:

This time it’s red states that suffer the most. This makes sense, since red states have higher levels of uninsured residents and, often, higher medical costs thanks to less competition in rural areas.

So why is this deduction being killed off? It seems like it came out of nowhere, and it’s not as if the tea party has been outraged by it or anything. One possibility is that a deeper dive would show that it’s mostly poor people in each state who have big medical expenses, and who cares about the poor? Another possibility is that this is some kind of subtle attack on Obamacare that I can’t quite get my hands around. Or maybe I’m not using the right data to really see what’s going on here. It’s mysterious.

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You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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