For Immediate Release
November 3, 2017
Extremely wealthy get six-figure tax break, residents barely getting by get $70
LANSING—The United States House of Representatives announced their Trump-approved tax plan yesterday that will benefit the wealthy, widen income disparity in Michigan, and set up a ballooning federal deficit and drastic budget cuts that will hurt our kids, families, schools and communities.
“This isn’t a tax plan, it’s a tax ploy. President Trump and congressional Republicans say their plan is about helping you, but it’s really about helping their political cronies and the richest of the rich pad their pockets,” said Karen Holcomb-Merrill, Vice President of the Michigan League for Public Policy. “The budget was a Trojan Horse to sneak in this dangerous tax plan. The real severe cuts are coming later, likely costing most Michigan residents far more in their quality of life than anything the tax plan would give them.”
“The plan will add at least $1.5 trillion in debt—and to pay for it, some Republicans in Congress have made clear they will try next year to cut everything from nutrition assistance for struggling families to education and healthcare. Worse still, by eliminating the state income tax deduction and shifting new costs to states, the plan would put more pressure on Michigan’s budget, likely causing even more cuts to education, transportation and other programs Michiganians count on,” Holcomb-Merrill said.
The Michigan League for Public Policy has analyzed the Republicans’ federal tax plan and put together a new fact sheet on what it really means for Michigan residents. The League has previously written about the top threats to Michigan in the federal budget, and 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 budget set up a fast-track, partisan process for passing the Republican tax plan with just 51 votes—the same process the Senate used to try to force through their repeal of the Affordable Care Act. The Institute on Taxation and Economic Policy (ITEP) analyzed the earlier Republican tax plan and found that it would overwhelmingly benefit those at the top of the economic ladder: the top 1 percent in Michigan would receive 62.5 percent of the tax cuts while the bottom 20 percent of Michiganians would get just 1.1 percent. Michigan households that make over a million dollars each year (only .2 percent of Michigan’s population) would see an average tax cut of $253,500, ITEP found. 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. And the bottom 20 percent of Michiganians would only see 1.1 percent of the tax cuts—or an average of $70.
“This tax plan does more for the wealthy in death than it does for working families’ daily lives, compounding the struggles of people in poverty,” Holcomb-Merrill said. “This plan will not create jobs, improve local economies, or help a majority of Michigan residents, and we hope the House chooses to scrap this foolish plan and creates one that helps all Americans, not just wealthy taxpayers and profitable corporations.”
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.