Robert W. Glover, University of Maine.
Mainers understand the value of community. We benefit from living in tightly knit towns and cities where people still know and care for one another. But for communities to work, they require maintenance and care: good schools, investment in infrastructure, emergency responders to keep us safe, access to affordable health care and housing.
The tax plan currently being rammed through the U.S. Senate would threaten our communities, providing little to no benefit for hardworking Mainers. And it would do so to finance a massive tax cut for millionaires and large corporations.
Senator Angus King has already taken a stand against both the substance of the tax plan and the lack of transparency in crafting it. Maine’s Senator Susan Collins was an important voice of reason and common sense in the health care debate this September. In many ways, Maine’s future once again depends upon her willingness to take a stand, opposing this irresponsible proposal as well.
Like the House plan passed a few weeks ago, the Senate bill offers deep tax cuts skewed to the most wealthy Americans and big corporations. Both bills are also financially irresponsible, drastically increasing the federal deficit over the next decade.
Unlike the House version, the Senate plan tries to pay for these cuts by repealing the individual mandate in the Affordable Care Act. The non-partisan Congressional Budget Office found that this measure would lead 13 million Americans to become uninsured and could result in a dangerous spike in insurance premiums. Senator Collins has sought a number of last minute deals to lessen the pain of this repeal, but they are insufficient.
Here in Maine, this disastrous move would mean 50,000 additional uninsured, and an average annual premium increase of $2,350 for a family of four starting in 2019.
The Senate plan’s tax cuts would also automatically trigger a $25 billion cut to federal funding for Medicare in 2018. In Maine alone, where roughly one in four individuals relies upon Medicare, this would mean $120 million in cuts just next year.
What exactly is worth imperiling the health and well being of so many Americans? Massive cuts in corporate tax rates are a primary culprit (cuts that would be permanent, unlike the individual income tax cuts which would expire after eight years). This measure alone, described as “not negotiable” by the Trump administration, would result in $1.4 trillion in lost revenue for the federal government over the next decade.
The income tax cuts contained in the plan would be an economic windfall for the wealthiest Americans. Those making over a million dollars a year would enjoy an average annual tax cut of roughly $48,000. The rest of us (including nearly all of us making less than $75,000 a year) would see next to nothing in cuts. Roughly one in three individuals in the bottom 60% of the income distribution would even face a tax increase. Analysis from the Institute on Taxation and Economic Policy shows that the Senate tax bill will result in a net $89 million tax increase for Mainers by the year 2027. It’s no wonder that recent polling showed that only 22% of Mainers support the plan.
And then there’s the estate tax. Currently, those who inherit estates up to $5.5 million dollars face no tax. The Senate bill would double this, meaning that one could inherit up to $11 million dollars without paying a penny of tax on it. This constitutes another giveaway to the wealthiest Americans, one that blows an $83 billion dollar hole in the federal deficit over ten years.
Make no mistake. These unfair cuts will have devastating impacts on Maine communities. Mainers are strong, resilient, and hardworking. But our communities need resources, and our society depends upon everyone paying their fair share.
If this tax proposal is passed, we can expect subsequent cuts to areas like education, transportation, infrastructure investment, food assistance, affordable housing, and our efforts to address the opioid crisis. No tinkering on the margins in the eleventh hour will change this.
Senator Susan Collins stood up for Maine families and communities when she rejected a haphazard, dangerous health care proposal from her Republican colleagues this September. She can do so again by opposing tax giveaways for the wealthy and large corporations, financed on the backs of ordinary Mainers.
Robert W. Glover is an associate professor of political science and honors at the University of Maine in Orono. He is the co-leader of the Maine chapter of the national Scholars Strategy Network, which brings together scholars across the country to address public challenges and their policy implications.