Republican tax bill cuts tax credits for businesses that hire disabled workers

William Brinker works in the stock room and delivering packages at PPD in Wilmington. Brinker, who turned 50 this summer, says the job is a dream come true.
William Brinker works in the stock room and delivering packages at PPD in Wilmington. Brinker, who turned 50 this summer, says the job is a dream come true.

William Brinker wanted to work for PPD in Wilmington, so he created a Power Point presentation to show the pharmaceutical company why it should hire him.

Thirteen years later, he’s still there working in the stock room and delivering packages. Brinker, who turned 50 this summer, says the job is a dream come true.

It’s a job that may not have been possible without the federal assistance provided to companies who hire disabled people. Brinker has spastic quadriplegia cerebral palsy and uses a motorized wheelchair and communication board. To accommodate him, PPD widened some of its cubicle space and allows Brinker to bring aids from the Arc of North Carolina with him on the job.

Disabled workers have job protections under the Americans with Disability Act, but two federal tax credits give businesses a financial reason to hire the disabled. Those tax credits are cut in the Republican tax bill and disability advocates worry that if the bill becomes law in its current form, companies – particularly smaller businesses – will have less incentive to hire disabled workers.

The Tax Cuts and Jobs Act has passed the House and could be voted on in the Senate later this week. Beyond the tax cuts, disability organizations are worried that the consequences of the bill could go even further by cutting Medicaid funding.

The support that allows Brinker to live independently, get new wheelchairs and receive on-the-job help is paid for through Medicaid.

“I am worried my way of life and my in-dependability is threatened,” Brinker said. “If major cuts were to cut my coverage in half or altogether, I would lose many things I have.”

What the bill does

The tax bill that passed the House of Representatives strikes both the Disabled Access tax credit and the Work Opportunity tax credit. The Senate version does not currently touch those credits. The two versions will need to be reconciled and passed by both chambers.

The Work Opportunities credit provides a tax credit for businesses that employ disabled people, as well as veterans and ex-felons. In 2013, 3,755 corporations and 60,385 sole proprietors filed for this credit, representing more than $1.5 billion in tax credited dollars.

The Disabled Access credit gives a small business a tax credit toward the cost of any accommodations it makes for disabled workers under the Americans with Disability Act.

In 2013, 80 corporations and 15,411 sole proprietors filed for the credit, representing more than $36 million in tax credited dollars.

Kathleen Romig of the Center on Budget and Policy Priorities said that while the Work Opportunity credit may give employers an incentive to hire the disabled, the Disabled Access credit allows them to do so.

“In order for businesses to achieve the goal of full inclusion, they might need a little extra help,” Romig said.

Disability advocates are worried that doing away with these credits will contribute to the high unemployment among disabled people. In 2016, according to the Bureau of Labor Statistics, only 17.9 percent of disabled people were employed.

Because the disabled “remain one of the most unemployed and underemployed populations in the country, we want to maintain every tool that employers have,” said Erika Hagensen, a policy consultant for Arc of North Carolina.

Brinker said he was confident in his current employment, but still worried about what repealing the credits could mean for other disabled people he knows.

“I know how much harder it would have been for me to get a job at PPD or anywhere else if these breaks were not given any more,” he said. “It would be much more difficult to get my foot in the door, and I would probably be overlooked by many companies because they don’t get a tax break for hiring me, and I, while a hard worker and good work ethic, cannot preform many physical tasks without help.

“I also know there are many other people with disabilities that want to work, and if these get repealed I can imagine it would be much harder finding jobs for them,” he added.

How NC voted

U.S. Sens. Thom Tillis and Richard Burr, both N.C. Republicans, did not respond to a request for comment on whether they would support a final version of the bill that included eliminating the tax credits.

All of North Carolina’s Republican congressmen voted for the House bill with the exception of Rep. Walter Jones from Farmville. The state’s three Democratic Reps. David Price and G.K. Butterfield, both from the Triangle, and Alma Adams, who represents the Charlotte area, voted against the bill. Efforts to reach Reps. David Rouzer, who represents Brinker’s home town of Wilmington, and George Holding of Raleigh were not successful.

“The Republican tax plan provides massive tax breaks for corporations and the wealthiest Americans,” said Price, of Chapel Hill, “and asks working families, students, seniors and veterans, and the disabled to foot the bill. Eliminating tax provisions that incentivize businesses to hire disabled people and improve disability access should be beyond the pale.”

Democrats and advocates for the disabled say the tax cuts are just part of their concern. They also say that because the tax plan adds $1.5 trillion to the nation’s debt over the next 10 years, Republicans will reduce funding for Medicaid and Medicare to pay for it.

Politifact has rated that claim half-true. It noted that spending for both Medicaid and Medicare will be reduced in the Senate budget, but said the link between the spending levels and the tax cuts are overstated.

Medicare and Medicaid “are everything to people with disabilities,” Romig said.

Medicaid pays for someone to help Brinker with his everyday living: feeding, chores, the toilet, doctor appointments – all of which allows him to live at home and not in an institution.

“Medicare and Medicaid have provided many things for me throughout my life and have made my life, and me trying to be much more independent, much better,” Brinker said.

“If I were to lose coverage I would most likely have to be put in a home of sorts, or move in with my mother and have her take care of me, and help pay for all my expenses,” Brinker added. “And no one wants to be a burden on their family.”

The tax credits being cut

The Disabled Access Credit

Section 44 of the tax code establishes that eligible small businesses can get a tax credit on expenses they make to comply with the Americans with Disability Act. In order to be eligible a business must have, in the prior year, earned less than $1 million in gross receipts and employed less than 30 people. The tax credit is 50 percent on eligible expenditures between $250 and $10,250. Section 3407 of the Tax Cuts and Jobs Act strikes Section 44 of the tax code.

Work Opportunity Tax Credit

Section 51 of the tax code establishes that businesses can get a tax credit for employing disabled people, veterans, ex-felons or members of a few other targeted groups. Businesses that employ individuals in one of these groups can get a credit of 40 percent of the individual’s salary. Section 3404 of the Tax Cuts and Jobs Act strikes section 51 of the tax code.