The wealthiest 1 percent of Montana households earning $535,000 or more would receive nearly $69,000 in tax savings each year under the tax reform plan released this month by the Trump administration, according to the Institute on Taxation and Economic Policy.
In contrast, the institute found, middle-income households earning $60,000 or less would see an average tax cut of $190, leading the Montana Budget and Policy Center to pan the proposal as a massive giveaway to the wealthiest earners.
“The resulting increase in deficits and debt would increase the pressure for cuts in investments across the country that produce long-term economic benefits,” the state center said. “Average Montana families and communities across the state ultimately stand to lose far more from federal cuts than we would gain from tax cuts outlined in the this new tax framework.”
Under the president’s proposal, the Institute on Taxation and Economic Policy found that Americans with incomes of at least $599,000 would receive 61.4 percent of the tax cuts. Those earning $40,000 to $66,000 would receive just 6.2 percent of the cuts next year.
In its report, the institute estimated that the president’s tax cuts would reduce total federal revenue by at least $4.8 trillion over 10 years, effectively increasing the national deficit. Advocates of the president’s proposal contend that revenues lost through tax cuts would be covered by increased economic growth.
Sen. Jon Tester, D-Mont., disagreed.
When I hear (Treasury) Secretary (Steven) Mnuchin say it’s going to pay for itself, that we’re going to use dynamic scoring or base it off dynamic scoring – which is code for smoking mirrors – we’ve got a problem,” Tester said in an interview last week. “The tax code needs to be fair, it needs to equitable, and it needs to work for Montana’s small businesses. And it can’t add to the debt.”
In an interview that aired on Fox News on Sunday, Trump dismissed assertions by Democrats that the GOP tax reform proposal would hurt the middle class as “their standard” line.
Sen. Steve Daines, R-Mont., who’s pushing for the president’s reforms, said the tax code hasn’t been updated in 30 years. He has launched a portal on his website asking Montanans to share their thoughts on the president’s proposed tax code.
“Tax reform is the single most important piece of legislation that we can pass this Congress,” Daines said. “This is exactly what the economy needs right now to keep growing and create more good-paying jobs. If we don’t get this done, frankly, they should send us all home.”
According to the Montana Budget and Policy Center, the richest 1 percent of Montana tax payers, or 5,000 individuals, would receive 56 percent of the tax cuts in Montana. That could impact services relied upon by many Montana families.
“Congressional GOP leaders may use deep cuts to Medicaid and Medicare to pay for these tax cuts, gutting programs essential for Montana families and our state budget,” the center stated. “It’s important to note that approximately 42 percent of Montana’s state budget comes from federal funds.”