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.”

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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.