EFFECTS OF THE TRUMP-GOP TAX PLAN ON ALASKA FAMILIES
The tax plan released by President Trump and GOP leaders in September 2017 would lose $2.4 trillion in revenue over 10 years, according to the non-partisan Tax Policy Center. The primary effects would be:
• The top 1% in America would get 80% of the tax breaks by year 10, and their taxes would be cut $207,000 a year, on average.
• Corporations and other businesses would get a $2.6 trillion tax cut—70% of corporate tax cuts benefit wealthier Americans.
• 3 out of 10 middle-class taxpayers (making $55,000-$93,000) in America would pay $1,300 more in taxes, on average, by year 10. • Also see Worst features of the Trump tax plan
At the same time, President Trump, Senate Republican leaders and the U.S. House of Representatives have proposed 10-year budgets that would slash $5 to $6 trillion from Social Security, Medicare, Medicaid, education and many more services. These cuts to services that primarily benefit low- and middle-income Americans would essentially help pay for tax cuts largely benefitting the wealthy and corporations.
TAX CUTS FOR THE RICHEST 1% IN ALASKA FROM THE TRUMP-GOP TAX PLAN
• The richest 1% will get 52% of the total tax cut in 2018.
• Their tax cut will be $77,880 in 2018, on average.
• There are 3,400 Alaska taxpayers in the richest 1%.
[Sources: Institute on Taxation and Economic Policy (ITEP) and ITEP taxpayers in top 1%]
TAX INCREASES ON THE MIDDLE CLASS IN ALASKA FROM THE TRUMP-GOP TAX PLAN
• 14% of households would get a $1,330 tax increase, on average, in 2018.
• 6% of households making $41,700 to $77,200 would get a $2,110 tax increase, on average.
• 26% of households making $77,200 to $125,000 would get a $1,300 tax increase, on average.
[Source: Institute on Taxation and Economic Policy]
EFFECT ON ALASKA OF REPEALING THE STATE AND LOCAL TAX DEDUCTION (SALT)
The Trump-GOP tax plan repeals the SALT deduction. Taxpayers can deduct state and local property taxes, and either income or sales taxes, from their federal taxable income. SALT helps taxpayers, many of them middle-class, avoid being double taxed at the federal level.
• Repealing SALT would raise taxes on 18% of Alaska taxpayers. Their tax increase would be $992 a year, on average. [Source: Tax Policy Center]
• For state and county level data on the number of households claiming the SALT deduction, the percentage that are middle-income and the average SALT deduction, see this report from the National Association of Counties.
• For congressional district-level data on the percentage of taxpayers claiming the SALT deduction and the average deduction claimed, see this report from the Government Finance Officers Association.
EFFECT ON ALASKA OF REPEALING THE FEDERAL ESTATE TAX
The Trump-GOP tax plan eliminates estate and gift taxes, losing $240 billion over 10 years and boosting the inheritances of the very wealthy. The federal estate tax is paid only by estates worth at least $5.5 million, just 2 out of 1,000 estates, or only 5,500 estates in all of 2017. [Sources: Center on Budget and Policy Priorities (CBPP) and Tax Policy Center]
• The number of Alaska estates that will be subject to the estate tax in 2018 is so small that the IRS does not publish it. [Source: Center on Budget & Policy Priorities]
• The estate tax will raise $31 million in Alaska in 2018—enough to pay for nutrition benefits for 15,587 people. [Source: Center for American Progress]
ALASKA SERVICES & PROGRAMS AT RISK DUE TO TAX CUTS
To pay for massive tax cuts to the wealthy and corporations, President Trump and GOP leaders have proposed deep cuts to services that working families rely on. The Senate budget resolution would cut over 10 years:
• $1.3 trillion from Medicaid and other health care programs
• $470 billion from Medicare
• $650 billion from income security programs, which may include cuts to the Supplemental Nutrition Assistance Program (SNAP, or food stamps), Supplemental Security Income (SSI) for disabled individuals, and tax credits for working families.
• Also at risk are Pell Grants and other financial aid to help students afford college.
• 34% of the state’s general revenues come from the federal government. [Source: Governing the States and Localities]
• Around 193,000 people are covered through Medicaid and the Children’s Health Insurance Program (CHIP) [Source: Kaiser Family Foundation (KFF)]
Medicaid serves: • 17,800 people with disabilities [Source: KFF] • 80,900 children [Source: KFF]
• 10,300 seniors [Source: KFF] • 3,700 veterans [Source: Families USA]
• 92,400 people are enrolled in Medicare, including original Medicare and Medicare Advantage plans [Source: Centers for Medicare and Medicaid Services]
• 86,800 people rely on SNAP food benefits [Source: U.S. Department of Agriculture (Fiscal Year 2017 monthly average)]
• 11,000 college students benefit from Pell Grants [Source: U.S. Department of Education, Table 21]