Trump, GOP tax cuts aren’t worth it

Ask anyone if they want a tax cut and more money in their pocket at the end of the year, and the answer will likely be yes.

But what if you found out that you, as a middle-class Michiganian, would bring home a few hundred dollars more a year, while the richest 1% in Michigan, those making over $500,000 a year, would take home 174 times what you got?

And what if these tax cuts also came at the expense of services that Michiganians rely on every day— food assistance, healthcare coverage, education, financial aid for college, and many other programs that help Michigan residents make ends meet?

Because that’s exactly what is going on in Congress right now.

Congress and President Donald Trump are talking about giving average Americans a tax cut. Their blueprint for tax reform uses buzz words like “tax relief for middle-class families,” “simplicity,” and “providing greater fairness.” The blueprint makes it sound like a good deal.

However, when you look at the details, the proposal is not much different than the vague framework that was released months ago, which would target the greatest tax relief to wealthy corporations and taxpayers and would be paid for by significant cuts to the things we rely on most.ITEP Graphic- Trump Tax Plan & MI

And when we look at the numbers, the message is clear. In Michigan, 62.5% of the tax savings would go to those in the top 1%, who make more than $500,000, according to recent data from the Institute on Taxation and Economic Policy. While the poorest Michigan residents would see an average tax cut of $70—and the Michigan middle class a $440 tax cut—those at the top would see a tax cut of about $76,560. Michigan’s millionaires, who represent just 0.2% of the state’s population, would get 47.3% of the cuts, at an average of $253,500.

What’s more is that these deficit-increasing tax cuts would come at a cost to programs that millions of Michigan residents use and rely on day after day.

Budget proposals from President Trump, the House and the Senate all seem to follow the same guidelines and plan to slash healthcare coverage including Medicaid and Medicare, leave more Michigan households hungry by cutting vital food assistance and make deep cuts to programs that help Michigan residents make ends meet. They also plan deep cuts to non-defense discretionary spending, which helps support our K-12 schools, environmental protection, low-income housing and infrastructure, among other needs. These are programs that are necessary to continuing to move the state and the nation—and their economies—forward.

All of these cuts just to put more money into the pockets of our wealthiest corporations and Michiganians.

These tax cuts aren’t worth their price.

— Rachel Richards, Legislative Coordinator

U.S. House and Senate budgets make billions in cuts for Michigan residents to pay for tax cuts for the ultra-wealthy

For Immediate Release
October 05, 2017

Contact:
Alex Rossman
arossman@mlpp.org
517.487.5436

Budgets threaten food assistance, Medicaid, disability programs, education, job training and more

LANSING—Today the U.S. House of Representatives passed a 2018 budget resolution that would slash billions of dollars from vital programs like food assistance and Medicaid that help millions of Michigan families afford necessities and get ahead. These damaging cuts at the expense of working Americans are designed to set up massive tax cuts for corporations and the very wealthy. The U.S. Senate’s budget resolution would have similar, harmful effects on Michigan residents.

The Michigan League for Public Policy has been warning residents about the impending devastation in President Donald Trump’s federal budget proposal and Congress’ continuation of its priorities. The federal budget was a primary focus of the League’s public policy forum held yesterday, and the League also recently developed a new fact sheet on the top threats to Michigan in the federal budget. The forum’s keynote speaker was Bob Greenstein, President and Founder of the Washington, DC-based Center on Budget and Policy Priorities, which has also prepared a report on the federal budget.

“Yesterday, hundreds gathered at the Michigan League for Public Policy’s policy forum to share their concerns about the impact of federal policies on our state. Today, those fears came one step closer to coming true,” said Karen Holcomb-Merrill, Vice President of the Michigan League for Public Policy. “The Michigan budget’s dependence on federal funds—currently accounting for 42 percent—makes our state particularly vulnerable to these federal cuts, and Governor Rick Snyder and legislative leaders in Michigan need to send their Republican counterparts in Washington a strong message opposing these cuts.”

An analysis by the League shows that Michigan is the second-most reliant on federal funds in the U.S., with 42 percent of our state budget coming from federal funds. The League has been urging Michigan residents to contact their members of Congress to oppose the cuts in the federal budget, but today’s vote still broke along party lines.

Both the House and Senate budgets set up a fast-track, partisan process for passing massive tax cuts for the wealthy and corporations. The GOP tax plan, released last week by congressional Republicans and the White House, would overwhelmingly benefit the top 1 percent in Michigan, who would receive 62.5 percent of the tax cuts, a new analysis released by the Institute on Taxation and Economic Policy (ITEP) shows. In Michigan, taxpayers who make over a million dollars each year (only .2 percent of Michigan’s population) would see an average tax cut of $253,500  while the bottom 20 percent of Michiganians would only see 1.1 percent of the tax cuts—or an average of $70, according to the ITEP analysis. The middle fifth of households in Michigan, people who are literally the state’s “middle-class,” would receive just 7.1 percent of the tax cuts that go to Michigan under the framework at an average of $440.

Not only would these tax cuts overwhelmingly benefit the very wealthy, they could also pile trillions onto deficits and likely force further cuts to health coverage and critical programs like education, and job training—and put more pressure on Social Security.

“The president and Congress appear to have the same misguided infatuation with tax cuts that some Michigan legislators have, and with this budget, they could decimate our revenue and devastate the services our state residents depend on,” Holcomb-Merrill said. “But residents still have power. Just as their voices and stories have helped fend off the repeal of the Affordable Care Act and a cut to the state income tax, they can fight back against these federal cuts.”

###

The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

A better budget for all Michiganians

From the First Tuesday newsletter
Sign up for the newsletter and e-news

In our world, “winning” isn’t clear-cut. There’s no finish line, no time limit, no line judges, and certainly no landslides. Our victories are determined not by a final score, but by a day-to-day analysis of how Michiganians are impacted by policies and programs. And when the state budget bills were passed by the Michigan Legislature in late June, they included several victories for us and the people we’re fighting for.

diversity 428x200Though we still have concerns about certain elements of the final budget, we are pleased that this budget was largely created with the well-being of Michigan residents in mind.

Food Security

One of our most important policy priorities is that of food security, and the new budget certainly earns solid marks in that area. A major goal of the League this year has been to support “heat and eat” to secure additional food assistance for hundreds of thousands of Michigan families, seniors and people with disabilities. Seeing this program funded is reassuring. The budget contains support for other valuable food programs, including “double-up food bucks” in Flint, which helps residents who receive food assistance make their dollars go further when purchasing fruits and vegetables that help combat the effects of lead exposure.

We had hopes that the Legislature would fund the Corner Store initiative, which provides grants to small food retailers, allowing them to make fresh, nutritious foods available in low- and moderate-income areas. However, we are grateful for the acknowledgment that this is an important program and hope that funding becomes available for it in the future. Another positive point in the healthy foods column is funding for farmers markets to purchase wireless equipment, allowing them to accept Bridge Cards.

Child Care and Education

Child care is another big focus of the League’s, not just due to the learning environment it provides for kids but because of the significant expense and concern it means for most parents. The final budget includes $8.4 million in state general funds and $19.4 million total to increase child care provider reimbursements—paving the way for more access to higher-quality care for families with low incomes. In addition, $5.5 million in federal funding from the Child Care Development Fund is appropriated to increase the entry eligibility level from 125% to 130%of poverty.

The expansion of At-Risk funding for students in struggling families is encouraging, as is the increase in per-pupil funding, particularly at the high school level. While the increase is not yet on par with inflation, it is certainly a move in the right direction. Another gain is the Legislature’s decision to increase funding for the Pathways to Potential program, which places ‘success coaches’ in schools to identify barriers faced by students and their families. This important program—left out of an earlier budget draft—will help students access important services, and the League commends Gov. Rick Snyder for recommending its expansion.

Healthcare

The decision to continue funding the Healthy Michigan Plan is a positive for all Michiganians—especially the 670,000 residents who rely on the plan for healthcare.

Department of Corrections

We are pleased that the Residential Alternative to Prison program was expanded. It provides low-risk probation violators an opportunity to avoid going to prison and instead enter a residential program in which they receive occupational training and cognitive behavioral programming. The budget not only continues this program in Wayne County, but adds $1.5 million to replicate it in 13 counties on the west side of the state.

Federal Cuts Loom

Unfortunately, the gains made in this budget could be undone by the senseless and insensitive policies being considered in Washington. If the Trump budget or the U.S. Senate’s Better Care Reconciliation Act (BCRA) are passed, the people of our state will lose many valuable resources and benefits. These federal cuts and program eliminations would dramatically shift costs to our state budget and force the Michigan Legislature to make cuts of their own.

While we celebrate the victories in the 2018 state budget, we urge you to take action against these proposals that would undo the good progress we’ve made. Please keep up the pressure in the fight against the repeal of the Affordable Care Act and the elimination of the highly successful Healthy Michigan Plan. And if you haven’t already, please contact your members of Congress and tell them you strongly oppose the Trump budget and its historically harmful cuts to the services our residents depend on.

Our success in the state budget process shows the power of persistence and advocacy. We will continue to put that same energy into policy work at the federal level, and we hope you will, too.

— Gilda Z. Jacobs