Both the Senate and House tax cut plans will erode state revenue that supports schools, universities, infrastructure, and safety. Additionally, neither plan is the answer for job creation. In fact, they will undermine our future by making it harder for the state to invest in what does build a strong economy.
After last week’s deadline to consider revenue bills in their originating house, two major tax cut proposals are now moving to the other house to be considered. The Senate plan includes a phase out of the corporate franchise tax and the 3 percent income tax bracket, as well as a self-employment tax deduction. The House plan phases out of the personal income tax.
While the total elimination of the income tax is the most drastic of these measures over time, the Senate plan is not affordable, either. In fact, in the first five years the Senate plan would cost $50 million more than the House plan. The cost of both of these plans would either require big cuts to key services like education, infrastructure, mental health, and public safety or require revenue be raised from increased sales taxes or property taxes. This would result in a tax shift on to lower- and middle-income earners as these taxes place a higher burden on struggling families.
Stay tuned. Tomorrow we will post about who benefits most from each of tthe proposed tax cut plans.