GOP Tax Bill Victimizes California Wildfire and Other Disaster Survivors

SACRAMENTO, California, Dec. 18 -- The California Department of Insurance issued the following news release:

If passed Tuesday, the GOP tax bill will victimize many disaster survivors a second time by eliminating the federal income tax deduction for wildfires, floods and other disasters not declared a federal disaster by the president.

According to a Congressional Research Service report, a total of 16 major disaster declarations were made in the state of California between 2000 and 2013. During that time, the federal government denied five disasters the federal disaster declaration. The 2016 Erskine Fire, which destroyed 290 homes, killed two people, and was one of the most destructive in Kern County history, was not declared a federal disaster. Had the GOP tax bill been law in 2016, Erskine Fire victims would not have been able to deduct their uninsured losses.

The GOP tax bill's elimination of the deduction for losses not declared a federal disaster also victimizes those who suffer damage to their homes and property apart from a disaster, because the current deduction applies to any casualty loss, which includes the theft of a vehicle or other property, damage or destruction of a home due to everyday common occurrences and losses.

"It is outrageous for President Trump and the GOP leadership in Congress to require wildfire survivors to bear the brunt of uninsured losses when they have already endured so much pain and loss," said Insurance Commissioner Dave Jones. "The GOP tax bill further victimizes wildfire and other disaster survivors where a federal disaster is not declared. It also victimizes those who suffer damage to their homes or other property where there was no disaster, such as kitchen fires, flooding caused by burst pipes, theft of a vehicle and other losses not covered typically by insurance."

"GOP Majority Leader Kevin McCarthy knows that many fires are not declared federal disasters--he complained vociferously when the Erskine Fire was not declared a federal disaster--and now he supports a GOP tax bill that eliminates a tax deduction for which his own constituents were eligible after the Erskine Fire in Kern County," continued Jones.

Areas burning now or burned recently are subject to flooding and mudslides when rain hits these vulnerable areas already devastated by fire. Losses suffered in the future won't be deductible, unless the president declares a federal disaster.

Californians are not alone in facing more frequent, more severe and more unpredictable catastrophic weather related disasters, including fires, floods and sea level rise. Uninsured damages can result from a lack of coverage, and even if the survivor has insurance, policyholder deductibles or insurance that reaches its maximum pay outs are common after every disaster. Many fire and other disaster survivors find themselves with large uninsured losses. The existing federal tax deduction provides relief for them.

In 2015, Americans deducted $1.6 billion for uninsured losses from natural disasters, according to the Internal Revenue Service.