Republican lawmakers in congress are working to fast-track tax legislation for President Trump by the end of 2017. House Republicans are attempting to pass a tax bill before Thanksgiving, with the Senate slated to take action in early December.
The rushed, closed-door process that has led to the current House Republican tax bill has resulted in a fundamentally flawed proposal that will hurt Maine working families and seniors. Specific areas of concern related to the House Republican tax bill are that it:
- Costs too much: The current plan would cost $1.5 trillion dollars over the next decade, blow a huge hole in the federal deficit, and force cuts to everything from nutrition assistance for struggling Maine families to education, health care, and infrastructure.
- Fails to put middle class families first: Half of the benefits of the House Republican tax bill go to the top 1 percent of Americans by 2027, and foreign investors will receive more in tax breaks than the bottom 60 percent of Americans combined. Furthermore, one out of every five Mainers will actually see their tax bill go up by 2027 if the House plan becomes law.
- Reflects misplaced priorities: The $1.5 trillion that Republican lawmakers plan to spend on tax breaks that predominately benefit the wealthy and foreign investors could be allocated differently to build the middle class and provide significant benefits to working families and seniors. For example, $1.5 trillion would roughly equal enacting and funding ALL the following initiatives that benefit working families and seniors:
- Doubling the Pell Grant program, which provides aid to low- and moderate-income college students; AND
- Doubling cancer research at NIH; AND
- Funding the full backlog of needed maintenance at National Parks; AND
- Providing child care assistance to 6 million children; AND
- Providing opioid addiction treatment to 300,000 people; AND
- Training 3.5 million workers for in-demand jobs.
- Puts us on a path to greater hardship, particularly in Maine: Because Congressional Republican proposals to cut federal spending almost always involve shifting costs down to state and local governments, the tax bill will put even more pressure on Maine’s budget. That would mean that cuts to services with widely shared benefits—such as schools, public health infrastructure, roads, parks, libraries, fire departments, and police departments—will likely follow. In addition, the GOP proposal to eliminate the state income tax deduction would make it harder for state governments to raise revenue to pay for these key programs and services. Some congressional Republicans have made clear that they intend to come back next year and try to pay for these tax cuts by cutting programs for seniors and families like Medicaid, Medicare, SNAP, affordable housing, and the part of the budget that includes Head Start and college aid; programs that hundreds of thousands of Mainers depend upon. For example:
- Around 265,000 Mainers are covered through Medicaid and the Children’s Health Insurance Program (CHIP) according to the Kaiser Family Foundation (KFF). That number includes: 130,000 children, 77,000 people with disabilities, 64,500 seniors, 15,000 veterans.
- 321,400 Mainers depend on Medicare, according to the Centers for Medicare and Medicaid Services .
- 189,000 Mainers rely on SNAP food benefits.
- 26,200 college students in Maine benefit from Pell Grants.
The House tax bill would exacerbate mounting income inequality and make it harder for low and middle-income Mainers to get ahead. The bill pairs new loopholes for the wealthiest individuals and corporations with eroding benefits for working families. It retains key elements of earlier GOP frameworks that would disproportionately benefit high-income households, including reducing the corporate tax, making changes to pass-through rules, and eventually repealing the estate tax.
States like Kansas know from experience that tax cuts for the wealthy hurt vital public investments in schools, public safety, and other priorities and fail to grow the economy or create jobs. After Kansas Gov. Sam Brownback enacted similarly drastic tax cuts tilted toward the wealthy, Kansas lagged its neighbors in economic growth and job creation. The tax breaks created a budget shortfall of $900 million, sending the state’s finances into a tailspin. As a result, Kansas lawmakers closed schools early, delayed road repairs, and slashed other services that help working people get ahead. Kansas’s failed experiment should be a wake-up call for federal lawmakers and a warning to all Americans.
Mainers deserve Congressional action that invests in working families and seniors who have been hit hard by the economic trends of recent decades and the slow recovery from the Great Recession. The House GOP tax bill does the opposite—it undermines investments in education, health care, infrastructure, and other building blocks of secure families and a thriving economy by putting the interests of the wealthy, large corporations, and foreign investors ahead of everyone else.
