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Economic Prosperity

Ohio Republican House Delegation Votes to Cut Medicaid, Medicare, and Public Education to Give Tax Breaks to Millionaires and Corporations

Oct 05, 2017

Vote was on the House Budget Resolution in Congress that set the stage for Trump-Ryan Tax Plan

All 12 members of Ohio’s Republican delegation in the U.S. House of Representatives voted today in favor of the Republican House budget resolution. The resolution proposes $5.8 trillion in cuts over the next decade to Medicare, Medicaid, education, infrastructure and other critical services while paving the way for trillions of dollars in tax cuts that would mostly benefit the wealthy and corporations. The House Roll Call vote is available here (sorted by state here).

The budget resolution also set up a procedure for fast-track consideration of tax legislation, enabling Senate Republicans to bypass bipartisanship to pass a tax plan with just 51 votes, rather than 60 votes typically required for such contentious legislation.

Congressional Republican leaders and President Trump released a framework for massive tax cuts last week that will cost at least $2.4 trillion, according to the non-partisan Tax Policy Center. The wealthy and corporations, which are primarily owned by rich shareholders, are the big winners. About 80% of the tax cuts will flow to the top 1% by 2027, when they would get a tax cut of $207,000, on average. That year under the plan, 3 out of 10 middle-class families making between $50,000 and $150,000 a year will pay $2,000 more in taxes, on average, depending on their income (the range is $1,300 to $2,500).

These large tax cuts will balloon the deficit and further jeopardize funding for Social Security, Medicare, Medicaid, and education. Included in the $5.8 trillion in cuts to services under the House-passed budget are Medicaid and other healthcare programs ($1.5 trillion), Medicare ($487 billion), and nutrition assistance ($150 billion).

More detailed data on these cuts and how the Trump tax cuts will affect people in Ohio are below.

“By voting for this budget resolution, Ohio’s Republican representatives in Washington have made it clear that they prioritize tax cuts for millionaires over protecting programs that matter to Ohio families, such as Medicaid and Medicare,” said For Ohio’s Future spokesperson Daniel van Hoogstraten. “The House budget resolution is a shameful ploy to hand massive tax breaks to millionaires, billionaires, and wealthy corporations, and Ohio’s children, families, and seniors will be left to pick up the tab.”

Below is an explanation of the tax cuts proposed under the Trump-GOP tax framework compared with the spending cuts proposed in the House budget resolution.

A more detailed version of this chart with sources is available here: https://americansfortaxfairness.org/wp-content/uploads/ATF-Comparison-of-Trump-Ryan-Tax-Plan-House-Budget-FINAL.pdf

STATE DATA AVAILABLE ON THE EFFECTS OF THE TRUMP-GOP TAX PLAN

General Analysis of the Trump-Ryan Tax Plan from Americans for Tax Fairness:

Tax Breaks for the Richest 1% and Tax Increases on the Middle Class:

  • In the U.S., the richest 1% of Americans will get 53% of the total tax cuts in 2018 and 80% after 10 years. They will get a tax cut of $129,000 in 2018, on average, and $207,000 in the 10th year.  [Source: Tax Policy Center]

  • In Ohio, the top 1% will get 58% of the entire tax cut. Their tax cut will be $56,280 a year, on average. There are 57,500 Ohio taxpayers in the top 1%.

  • Meanwhile, 15% of Ohio households would see their taxes increase in 2018 by $1,570 on average. 10% of households making between $38,700 and $58,900 would see their taxes increase by $760 on average. [Sources: Institute on Taxation and Economic Policy and ITEP taxpayers in top 1%]

Estate Tax Repeal:

Repeal of the State and Local Tax Deduction:

  • The Trump-Ryan tax plan repeals the deduction for state and local taxes (SALT), raising taxes on the middle class and undermining local public services. Repealing SALT would raise $1.3 trillion over 10 years. Taxpayers can deduct state and local property taxes, and either income or sales taxes, from their federal taxable income. Over a third of taxpayers making $50-75,000 use the SALT deduction, and over half of those making $75-100,000. An average family in this last group would see their federal taxes jump by $1,800 if SALT is repealed. In addition to boosting middle-class taxes, repeal of the SALT deduction will make local taxation more expensive, putting pressure on localities to cut budgets for services like roads and schools. [Sources: Tax Policy Center, Government Finance Officers Assoc.]

  • In Ohio, repealing SALT would raise taxes on about 24% of taxpayers, who would face a tax increase of $1,950 on average. [Source: Tax Policy Center]

  • According to the Institute on Taxation and Economic Policy (ITEP), “Taken on its own, repeal of the state and local tax deduction would primarily impact higher-income earners. In the context of the overall framework, however, its ultimate impact falls more heavily on families in the middle- and upper-middle portions of the income distribution. This is because while the taxpayers at the very top of the income distribution would initially be impacted by repeal, the tax cuts they receive in return for giving up their deduction are more than enough to offset that impact. The framework is far less generous in offering offsetting tax cuts to middle-income families.” [Source: ITEP]

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