Although the Trump Administration has cited many benefits concerning the 2017 tax reform bill, Republicans are now facing anger from families of fallen service members due to the financially negative consequences they have experienced as a result of the new tax law.
Minors’ Benefits Treated as Inheritances
The Internal Revenue Service now handles survivor benefits for children of fallen service members differently than it did in previous years. Under the new Tax Cuts and Jobs Act, survivor benefits paid out to minors are now treated as inheritances, such as stocks. This has driven taxes up by thousands of dollars for many people, thus creating financial hardships for families of fallen service members.
Several large veterans organizations, including TAPS, are currently planning a demonstration, which will be scheduled sometime around the Memorial Day holiday. During this demonstration, citizens plan to lobby lawmakers for tax reform with an ultimate goal of changing the way Gold Star families receive benefits.
The higher tax burden for such individuals is just one of several glitches that members of Congress have had to address after the hastily-passed tax bill went into effect. Republicans are currently discussing various ways to remedy the survivor benefits situation. A military-focused publication called Task and Purpose first drew attention to the problem earlier this week when the higher tax bills were reported to the publication.
The increase in taxes on survivor benefits was referred to as an “unintended consequence” of the new tax code, according to Rob Damschen, who is the Republican House Ways and Means Committee Communications Director. In a statement made to CNN, Damschen said that lawmakers and analysts did not recognize in advance that the new tax bill would affect children of veterans and drive up taxes for their families.
New Bill Introduced
Senator Doug Jones (D-AL) introduced a bill called the Military Widow’s Tax Elimination Act of 2019. The bill, introduced in February, would change things for the better for families of fallen service members. Nineteen Republicans and 37 Democrats have signed onto the bill. In addition, Representative Joe Wilson (R-SC) has re-introduced the Military Surviving Spouses Equity Act, and the legislation has won over 115 Republican cosponsors and 120 Democrat cosponsors. Another supporter of the bill is Senator James Inhofe (R-OK) who is the chairman of the Armed Services Committee. An estimate of what a 2009 version of the bill would cost to implement came in at approximately $7 billion, but this would be spent over the course of ten years. This estimate was put forth by the Congressional Budget Office.
Surviving Spouse Reaches Out to Congress
Many surviving spouses, such as military widow Jessica Braden-Rogers, whose tax bill went from $1,135 to $4,471 under the new tax laws, stated to CNN that Congress needs to consider the impact the new tax law has on Gold Star families and children, whom she stated have already sacrificed enough. Braden-Rogers has reached out to congressional members to express her thoughts on the higher taxation and tell her story, but so far she has failed to get a response.
In an interview on CNN, Ashlynne Haycock–TAPS deputy policy director for military families–stated that surviving families have suffered severe hardships because of the higher taxes and that people were literally shocked by this new tax dilemma.