The U.S. House tomorrow and the Senate in two weeks are expected to vote on their respective budget resolutions that will chart a course to enact President Trump’s proposed tax plan with simple majorities in each chamber. The Trump tax proposal is unprecedented in terms of how severely tilted the tax breaks are toward millionaires and billionaires. Two-thirds of the tax benefits next year would be slated for the pockets of the top 1% of Americans, those with incomes averaging $2.1 million. The tax proposal would increase the after-tax income of this group by $129 billion next year with little benefit to the average working family.
In Maine, the proposed federal tax breaks are also heavily slanted toward the wealthiest families. In 2018, the wealthiest 1% would receive 39% of all tax breaks for Maine taxpayers, further widening the gap between the wealthiest Mainers and everyone else.
In fact, 1 in 7 taxpayers would see their tax bills go up. Among those who would see their taxes go down, the top 1 percent of Mainers whose average income is $1.2 million, would receive an average tax cut of $43,130 while the poorest 20 percent of Mainers whose average income is $13,000 would get an average cut of $90.
Tax cuts of this scale have long-term consequences. The 2001 and 2003 Bush tax cuts drained a national surplus, are responsible for one-third of the national debt, and have contributed to federal deficits that have been used to justify years of austerity spending. Vital services that strengthen families and promote opportunity eroded. For example, fewer than 1 in 6 eligible children benefit from child care assistance for low-income families because of insufficient funding. Federal funding for job training and employment services grants also fell 40% since 2001.
States like Kansas know from experience that tax cuts for the wealthy and corporations just put important programs at risk and don’t grow the economy or create jobs. After Kansas Gov. Sam Brownback enacted 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. In response, Kansas lawmakers closed schools early, delayed road repairs, and underfunded other services that helped working people get ahead.
The Trump tax plan would have similarly devastating impacts nationwide, leading to deeper cuts to these and other programs like Medicare and Social Security on which Mainers rely and undermining efforts to grow and strengthen the middle class. Trump’s tax framework is harmful for Maine families if enacted, and Congress should quickly defeat it.