MLPP Blog: Factually Speaking

This Thanksgiving, Republicans in Congress offer a recipe for disaster

Added November 20th, 2017 by Rachel Richards | Email This Entry Email This Entry
Rachel Richards

Regardless of how much you love your family, the holidays are always stressful. The turkey is either raw and salmonella-inducing or dry and burnt, someone always gets sick, at least one kid has a meltdown, and someone’s feelings inevitably get hurt. The holidays, as fun as they are, are always a little uncomfortable—even if it’s just from a tight-fitting waistline.

Politics often get brought up and tempers flare—and federal Republicans’ tax bill that is their “must-pass” bill of the year threatens to make it worse.

This tax bill is moving fast (it has already passed the U.S. House), and there’s a good reason for that. Congress wants you to focus on their lip-service rather than just how bad the bill is. Much like a relative’s Thanksgiving mystery dish, Republicans don’t want you to know what’s in it and are completely ignorant of how little it’ll actually be enjoyed by anyone.

This tax plan will not help most Michigan residents—and the people who need the most will get the least. The truth is that this deficit-increasing tax bill gives massive tax cuts to the wealthy and profitable corporations, provides little benefit to the rest of us, and puts important services we all rely on in jeopardy.

For example, in the first full year of implementation of the U.S. Senate’s bill, taxpayers in the top 1%—those making more than about $515,000 a year—would see an average tax cut of $46,100. On the other hand, taxpayers in the bottom 60% percent—those making less than about $70,000—would see an average tax cut of $390. In fact, some Michigan residents could even experience tax increases in order to pay for cuts to the wealthy and businesses. By 2027, taxes on low- and middle-income Michigan taxpayers would be raised while highest- income earners would still enjoy fairly sizable tax cuts. (For more information on how the tax plans will impact you, please head over to the Institute on Taxation and Economic Policy to check out their analyses of the U.S. House and Senate bills.)


What’s even more surprising is that the U.S. Senate bill fundamentally changes healthcare for our residents. The bill repeals the individual healthcare mandate to pay for huge corporate tax rate cuts. This “sneaky repeal” is just as bad as the “skinny repeal” that was defeated earlier this year. With this change, 398,000 Michigan residents will become uninsured by 2025, premiums on the marketplace would rise by $1,520 for a family of four, and Michigan could experience a cut to Medicare nearing $1 billion.

Finally, the tax plan would drastically increase the deficit to the tune of around $1.5 TRILLION. As the deficit grows, federal lawmakers will feel the pressure to “right-size” the budget, and, believe me, this would mean cuts felt by all of us. This would just mean fewer Michigan residents with healthcare, with access to high-quality educations, with safe roads and bridges, with food regularly on the table and in their cupboards, and with vibrant lives. So in the end, we all suffer to make the wealthiest more comfortable.

Over the past year, we’ve had to fight many uncomfortable fights. But I’m asking you to fight one more. We can do something about the uncomfortable situation we are all in.

Federal Republicans are hoping they can catch us sleeping from the tryptophan and sneak this bill through before we wake up to see what it really means for most of us. We need to call our federal lawmakers and ask them all to go back to the table and create a tax bill that works for everyone. We can support our lawmakers who continue to lift up the problems with this bill. We can show Congress just how uncomfortable this tax bill makes us all, and we can and must stop it.

— Rachel Richards, Legislative Coordinator

Trump, GOP tax cuts aren’t worth it

Added October 10th, 2017 by Rachel Richards | Email This Entry Email This Entry
Rachel Richards

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

A token tax cut — A bad deal for everyone

Added July 15th, 2015 by Rachel Richards | Email This Entry Email This Entry
Rachel Richards

When you think of road funding, your first thought is… a tax cut? Likely not, but earlier this month the Senate rolled out a road funding plan that included an income tax cut. This was an attempt to sweeten a gas tax increase. But as it turns out, it’s a bad deal for everyone.

This is a bad deal for you. It wouldn’t take effect until 2018 at the earliest. It’s not guaranteed – only when General Fund revenues grow faster than inflation. It likely amounts to token rate reduction in any given year. For example, if revenues rise 1% faster than inflation, you’re looking at a rate rollback of 0.04 percentage points – a family of four making $50,000 would see a tax cut of less than $15. And wealthier individuals will benefit the most from the across-the-board tax cuts. (more…)

Save the EITC!

Added July 8th, 2015 by Gilda Z. Jacobs | Email This Entry Email This Entry
Gilda Z. Jacobs

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One of the state’s most effective tools for reducing poverty and building economic security is in jeopardy. House Republicans, led by Speaker Cotter, want to eliminate the Michigan Earned Income Tax Credit, effectively raising taxes on 780,500 low-income working families raising 1 million children. (more…)

Graduated Income Tax: Making our system fairer while raising needed funds

Added May 21st, 2015 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

As the issue of “tax fairness” continues to arise and the state faces a significant budget shortfall, perhaps it’s time to seriously consider changing Michigan’s income tax structure. Michigan is one of only eight states with a flat income tax rate, and, because of this structure, low-income taxpayers pay the 9th highest personal income taxes for their group in the country, while the top 1% actually pay at a slightly lower rate than their counterparts in other states. A graduated income tax structure, where those who earn more would pay more, makes the income tax system fairer and generates new funds. (more…)

Undocumented immigrants: Reform increases their tax contributions

Added April 20th, 2015 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

Editor’s note: The original blog post and ITEP report incorrectly stated the effective tax rate for the top 1% of earners in Michigan. We apologize for this error, which has been corrected.

Undocumented immigrants already contribute a significant amount to our state’s tax system. Under President Obama’s 2012 and 2014 executive actions, the amount will increase and could be even more with comprehensive reform.

According to a new 50-state study, “Undocumented Immigrants’ State and Local Tax Contributions” by the Institute on Taxation and Economic Policy, the 100,000 undocumented immigrants living in Michigan contribute $86 million in state and local taxes. With the president’s executive actions, ITEP estimates that this will increase by $10.86 million when it is fully implemented to allow temporary reprieve to youth who have resided in the country for at least five years and parents of U.S. citizens or legal residents. If comprehensive reform were undertaken granting lawful permanent residence to all undocumented immigrants in Michigan, the gain would be about $26.4 million. (more…)

Child poverty in the 21st century

Added February 27th, 2015 by Jane Zehnder-Merrell | Email This Entry Email This Entry
Jane Zehnder-Merrell

The number of Michigan children living in families with income below the poverty level drops by half when tax and non-cash benefits are included as income, according to the latest analysis from the national KIDS COUNT project at the Annie E. Casey Foundation.

The percentage of the state’s children who would be living in poverty if no government program benefits and tax credits were available, however, stood at 30 percent, as calculated by the Supplemental Poverty Measure. (more…)

Why kids count

Added February 19th, 2015 by Jane Zehnder-Merrell | Email This Entry Email This Entry
Jane Zehnder-Merrell

Recent news reports celebrate the decline in the unemployment rate and the quickened tempo of the recovery. But four years into the recovery, Michigan’s child poverty rates remain consistently high.

In 2013, one of every four children in Michigan lived in a family with income below the federal poverty level (roughly $18,800 for a single-parent family of three and $23,600 for a two-parent family of four), according to the latest Kids Count in Michigan Data Book, released today. (more…)

An income tax cut won’t boost the economy

Added February 9th, 2015 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

Cutting taxes won’t create jobs or grow the economy. Michigan is already facing budget cuts because there is not enough money to fund schools, public safety and other important services that we value. Reducing the income tax would create an even bigger hole in the budget, leading to more cuts and making it harder to create a strong workforce ready for the 21st century, according to a new fact sheet from the League. (more…)

Happy 40th Birthday, EITC!

Added January 30th, 2015 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

Today is EITC Awareness Day, and this year marks the 40th anniversary of the widely recognized tool that lifts millions of working families and children out of poverty each year. States have the opportunity to build on the federal credit, which Michigan does. However, in 2011 the state’s Earned Income Tax Credit was cut leaving behind over 15,000 families in poverty in 2012. On May 5, the voters will have the opportunity to restore the credit by supporting an increase in the sales tax by one penny.

The Michigan EITC is only available to families who have earned income from working. The credit ensures that working families are better able to make ends meet. When combined with the federal EITC, working families are lifted out of poverty and children experience better outcomes, such as improved infant and maternal health; better school performance; greater college enrollment; increased work and earnings in the next generation; and Social Security retirement benefits. All of which also benefit Michigan’s economy. (more…)

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