House and Senate Tax Plans are Both Unaffordable
March 5th, 2015
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.
The Details and the Costs
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. Those tax plans are the Senate plan, which includes a phase-out of the corporate franchise tax and the 3 percent income tax bracket and a self-employment tax deduction, and the House plan, which includes a phase-out of the personal income tax.
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While the total elimination of the income tax is the most drastic of these measures over time, the Senate plan is not affordable by comparison. 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 onto 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 the proposed tax cut plans.