KFTC members support the People’s Budget — a good benchmark

KFTC members from across the state told their Congressperson that they stand in support of the People’s Budget. This included policy supports for tax fairness such as the Estate Tax, so that as a country we can make investments in our nation’s bright future.

However, there is a sizeable gap between what these members and Kentuckians are calling for, and what Congress is so far delivering as the blueprint for tax and budget policies.  Earlier this month, the U.S. House of Representatives passed a repeal of the estate tax — an important safeguard against gross accumulations of wealth.  This repeal, if it were to pass both chambers and be signed into law, would be damaging to Kentucky.

Next year, Kentucky is expected to have only roughly 40 estates owing any estate tax. At the same time, Kentucky’s economic well-being is absolutely tied to the federal investments that are funded in part by the estate tax.

According to the Kentucky Center for Economic Policy (KCEP) Kentucky receives about $6,496 of federal aid per person every year, to fund Medicare, Social Security, Pell Grants, unemployment benefits, and more. That is the eighth-highest among the states and 15 percent more than the U. S. average of $5,662.

Representative John Yarmuth of Louisville wasonly member of Kentucky’s delegation that voted against repealing the estate tax.

Weakening the estate tax and continuing to cut corporate taxes weakens the ability to make federal investments in people and communities — a consequence that the rest of the House’s proposed tax and budget plan embraces.

In addition to omitting President Obama’s initiatives to shape a just transition in Central Appalachia through the Power + Plan, the House budget proposes several harmful cuts. According to the Center for Budget and Policy Priorities:

More than two-thirds of the cuts would come from programs that are specifically to help low- to moderate-income folks, even though these programs are relatively inexpensive, making up less than a third of the cost of all federal programs.

The House budget proposal cuts SNAP by more than a third between 2021 and 2025. During this time, food stamps would become a block grant that states would oversee, and would be jeopardized.

It cuts funding for Pell Grants, and freezes the maximum grant level for ten years. (Tuition costs will not be frozen over the next ten years, and student loan debt is already oppressive.)

It repeals health care reform, including the Medicaid expansion, which has made a huge impact on Kentuckians’ ability to get health care coverage.

KFTC has endorsed the People’s Budget, put forth by the Progressive Caucus. Although the House has already rejected the People’s Budget, it serves as an important benchmark for what good public and economic policy looks like, and what Congress should be supporting.

JoAnn Schwartz, who serves on KFTC’s Economic Justice Committee, says, “The People’s Budget reads like a KFTC wish list.  I think the more conversations around the People’s Budget, the better. And the more organizations that will support it, the more its message will be spread.”

The Economic Policy Institute is one policy organization that endorses the policies in the People’s Budget because it prioritizes growing jobs and opportunities, and pays for it by asking corporations and the wealthy to contribute their fair share.

Specifically, the People’s Budget calls for:

• Adding higher marginal tax rates for millionaires and billionaires
• Taxing investment income like labor income, and taxing financial transactions like stock trading
• Restoring a more progressive estate tax
• Eliminating inefficient corporate tax loopholes
• And with this revenue, along with cutting some defense budgets, the budget is able to support economic recovery:
• Expanding tax credits for low- to middle-income earners
• Creating jobs: 4.7 million in 2015 and another 3.8 million over the next two years
• Strengthening our shared social safety net by increasing funding for education, access to higher ed, job training, employment, and social services

You can learn more about the People’s Budget at cpc.grijalva.house.gov or from the Economic Policy Institute at www.epi.org.