The U.S. Senate narrowly voted 51-49 to pass its budget resolution. Unfortunately, the budget passed by the Senate has many similarities to the House budget that was passed less than two weeks ago. Overall, this budget framework will harm millions of Americans and set our country in a downward trajectory as, over the next 10 years, it will:
- increase the U.S. deficit by $1.5 trillion;
- cut Medicaid by $1 trillion;
- cut Medicare by $473 billion; and
- slash over $4 trillion dedicated to programs for student and families such as Pell Grants and student loans, food assistance, housing assistance, income assistance for children with disabilities, social security disability insurance, and others.
Why did the senate pass this budget and what happens next?
Republicans in the Senate voted for this budget because it gets them one step closer to passing tax legislation proposed by President Trump without needing any votes from Democrats.
The latest from the House Speaker is that they intend to vote on a tax bill next month.
What does this tax plan mean for the U.S?
Analysis of the tax framework proposed by President Trump and GOP leaders shows that the benefits are overwhelmingly tilted toward the richest taxpayers. Specifically, across the U.S., more than two-thirds (67 percent) of all tax cuts contained in the framework would go to the richest one percent of Americans in 2018.
What does this tax plan mean for North Carolina?
In North Carolina, 57.6 percent of the tax cuts would go to the richest 1 percent of taxpayers. These taxpayers would receive an average annual tax cut of $50,440 a year. In contrast, a recent NC Budget & Tax Center release shows that both the middle income group and the poorest in our state would receive a smaller share of the tax cut compared to the wealthiest:
“The poorest in our state, those with an average annual income of about $13,000, would only receive 1.7 percent of the tax cut, which would be equivalent to $80. Meanwhile, the middle income group, with an average income of $45,000, would receive 12.2 percent of the tax cut, which would be equivalent to $550.”
It is clear that, as Congress focuses on passing tax legislation, it needs to hear from all Americans that these outcomes are not acceptable. The people of this country deserve a budget and tax plan that puts the prosperity of all Americans first— not the financial interests of a select few.
Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.