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Facts about the Trump tax and budget plan

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June 30, 2017

President Trump’s tax and budget plan for 2018 would have far-reaching consequences for Oregon and the nation. This publication compiles data and analysis on how those plans would impact Oregonians.


Trump's Tax Plan


Corporate Taxes

Trump proposes cutting corporate taxes and diverting even more wealth to the richest Americans.

The Trump tax plan would cut the corporate tax rate from 35 percent to 15 percent, costing $2.2 trillion over ten years.

U.S.-based multinational corporations currently face a tax rate of 35 percent on foreign profits brought back to the U.S., which Trump proposes to cut to 0 percent.

Shifting to a 0 percent tax rate on foreign profits could cost the U.S. an estimated $130 billion over ten years.

Corporate tax cuts mainly flow to the top 1 percent of taxpayers, who receive 53 percent of the benefit from corporate tax cuts.

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Estate Tax

The Trump tax plan would abolish the federal estate tax, enriching the wealthiest of the wealthiest heirs.

Under the Trump tax plan, the wealthiest of the wealthiest — just two out of every 1,000 — American families would get a combined tax cut worth $269 billion over the next ten years.

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Impact on Oregonians

The Trump tax plan would cut the taxes of the richest Oregonians most.

Compared to residents of other states, Oregonians would receive the sixth smallest share of benefits from the tax cuts relative to the state’s population.

The highest-earning 1 percent of Oregonians would receive an average tax cut of $71,200, while the lowest-earning 20 percent would receive an average tax cut of $110.

The lowest-earning 60 percent of Oregon taxpayers would receive 14.7 percent of the tax cuts, while the highest-earning 20 percent would pocket 70.4 percent of the Trump tax plan’s benefits.

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Income Taxes

The Trump tax plan would exacerbate income inequality by cutting income taxes for the richest Americans.

The Trump tax plan would give on average a $250,000 income tax cut to the wealthiest 1 percent of American taxpayers.

The Trump tax plan would give the 400 highest-income taxpayers a tax cut that averages at least $15 million each year — five times what the typical college graduate earns in their lifetime. These 400 households together would get a tax cut totaling $6 billion per year.

The Trump tax plan would eliminate the Alternative Minimum Tax (AMT), which primarily applies to higher income households. Over 60 percent of households making between $500,000 and $1 million pay additional taxes because of the AMT. The Trump tax plan would lower their taxes.

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Other Business Taxes

Reduced taxes on “pass-through business income" would primarily benefit the highest earning Americans and promote tax avoidance among the rich.

The Trump tax plan would cut income taxes for owners of S-corporations, sole proprietorships, and partnerships, from a top rate of 39.6 percent to 15 percent. From this “pass-through income” tax cut, the richest 400 filers would each receive, on average, a tax cut of $9 million.

The tax cut on pass-through income would benefit only 6.6 percent of households, with 77 percent of the benefit going to the top 1 percent of income earners.

Shifting to this 15 percent rate on pass-through business income would cost the U.S. between $1.5 trillion and $2.0 trillion over ten years. Of this amount, as much as $580 billion would be due to high-income earners reclassifying their wages as business pass-through income to take advantage of this tax cut.

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Trump's Budget Plan


Education

The Trump budget would undermine education in Oregon.

The Trump budget would cut $20 million in education funds to Oregon for preparation, recruitment, and on-going development of high-quality K-12 educators, and for smaller class sizes.

Under the Trump plan, the value of Pell grants, which help low-income students afford college, would erode, ultimately covering 35 percent fewer college costs by the 2025-26 school year.

Some 94,000 Oregon students in the coming school year may not be able to attend or finish college, due to the Trump budget’s elimination of federally subsidized loans. Cutting this federal education assistance would jeopardize college attainment for 20,000 students in Rep. Suzanne Bonamici’s district, 11,000 students in Rep. Greg Walden’s district, 20,000 students in Rep. Earl Blumenauer’s district, 22,000 students in Rep. Peter DeFazio’s district, and 22,000 in Rep. Kurt Schrader’s district.

The Trump budget would eliminate the only federal funding source dedicated exclusively to after-school activities that boost academic achievement in high poverty schools and prevent drug involvement, costing Oregon's programs $11.2 million in 2018.

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Employment

The Trump budget would undermine Oregon's workforce investments.

The Trump budget would cut job training and employment services for Oregonians looking for work or wanting to improve their skills to get a better job. The budget would slash funding to assist those Oregonians by nearly 40 percent, from $45 million to $27 million in 2018. As a result, more than 85,000 Oregonians would lose employment assistance.

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Environment

The Trump budget would turn back efforts to make Oregon’s environment clean and safe.

The Trump budget would cut by 24 percent funds for state and tribal efforts to improve the safety of water and air.

The Trump budget would slash funds to clean up hazardous “Superfund” sites by 30 percent, 14 of which are in Oregon.

The Trump budget eliminates the Environmental Justice Program for communities that are on the frontlines of pollution and climate change threats.

The Trump budget retreats from moving the country toward clean energy by cutting funds for development of new clean energy technologies by nearly 70 percent, ending support for private investment in new technology development, and eliminating investments in energy ideas that are not attractive to private investors.

The Trump budget would undermine recreational opportunities for Americans by cutting funding for the country’s national parks and monuments, which include Oregon’s Crater Lake and Oregon Caves, by 12 percent and cutting resources for local parks and play facilities by more than 65 percent.

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Health

The Trump budget would hurt health care in Oregon.

By cutting $1.9 trillion in federal health care funding over ten years, the Trump budget would take away health insurance for more than 23 million people with modest incomes across the country and raise out-of-pocket costs for millions more.

The Trump budget would cut $1.6 trillion over ten years from Medicaid alone, which provides health insurance for low-income Americans, including more than 1.1 million in Oregon.

The Trump budget would take away health insurance coverage for the 375,000 adults who get insurance through Oregon’s Medicaid program, Oregon Health Plan, as a result of the state’s program expansion under the Affordable Care Act. Most of these adults work but do not have affordable health insurance through their job.

Oregon would be one of the hardest hit states under the Trump budget’s elimination of extra funds for states to expand Medicaid. Oregon would lose nearly 42 percent of the federal funds it receives for the Oregon Health Plan — a larger share lost than every other state except Washington.

The Trump budget would jeopardize health care for 600,000 low-income seniors, people with disabilities and children who rely on the state’s Medicaid program, the Oregon Health Plan.

The Trump budget would mean some Oregon children covered through the Oregon Health Plan would become uninsured or pay more for care.

The Trump cuts to Medicaid would cost Oregon 37,000 jobs in health care and other industries.

The Trump cuts to Medicaid would hit rural counties particularly hard, where 30 percent of residents rely on the Oregon Health Plan, as compared to 24 percent of residents of urban counties.

Children in rural Oregon stand to lose more under the Trump cuts to Medicaid than children in any other rural part of the country because they had the largest jump in Medicaid coverage as a result of health reform — a gain of 18 percent. In many rural areas of Oregon, more than half of children rely on Medicaid.

The Trump budget would undermine access to opioid treatment. In Oregon, more drug poisoning deaths involve prescription opioids than any other type of drug, including alcohol, methamphetamines, heroin and cocaine. An average of 3 Oregonians die every week from prescription opioid overdose, and many more develop opioid use disorder.

The Trump budget would eliminate funding for two primary programs that reduce children’s exposure to lead.

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Housing

The Trump budget would exacerbate Oregon’s housing affordability crisis.

The Trump budget would cut nearly 4,000 housing vouchers for Oregonians in 2018. The vouchers help families secure affordable housing in the private market.

The Trump budget would cut funds to Oregon for public housing by about $9 million.

Federal funds to develop affordable housing, promote home ownership, and promote economic development in Oregon would decline by by $44 million as a result of the Trump budget.

The Trump budget would eliminate funding to help people in need — particularly seniors, people with disabilities, and households with children — pay their home energy bills. This would cost Oregon families $35 million in 2018.

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Hunger

The Trump budget would increase hunger in Oregon.

The Trump budget would cut the Supplemental Nutrition Assistance Program (SNAP, or “food stamps”) assistance in nine different ways that would slice nearly $200 billion from the food budgets of households across the country.

Oregon would need to pay $268 million in SNAP food assistance costs per year, its portion of program costs that the federal government would shift to states.

The Trump budget would cut food assistance to 57,000 low-income Oregonians, most of whom are seniors and people with disabilities, by eliminating the SNAP minimum benefit.

One of every six Oregonians relies on SNAP food assistance, about 735,000 residents. If the Trump budget were enacted, households in would lose SNAP benefits, including 4,300 households in Rep. Suzanne Bonamici’s district; 6,600 households in Rep. Greg Walden’s district; 6,400 in Rep. Earl Blumenauer’s district; 6,800 in Rep. Peter DeFazio’s district; and 5,400 in Rep. Kurt Schrader’s district.

In total, the Trump budget would make more than $193 billion in cuts nationally to SNAP food assistance by 2023, denying low-income children, families, seniors, and people with disabilities guaranteed access to a basic diet.

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Rural Communities and Economies

The Trump budget would undermine Oregon’s rural communities and economies.

The Trump budget would cut funding by 12 percent for counties that have federally-owned land, which is exempt from property taxes. The “Payments in Lieu of Taxes” program helps make up for the foregone revenue. Oregon is one of the largest beneficiaries. Oregon received over $18 million in 2016, the bulk of which went to 11 of Oregon’s rural counties: Malheur, Deschutes, Lake, Harney, Umatilla, Union, Baker, Jackson, Klamath, Crook, and Josephine.

The Trump budget would harm Oregon’s rural communities by eliminating loans and grants for small, financially distressed rural communities to extend and improve water and waste treatment facilities. In 2016, Oregon’s rural communities received 14 grants and loans worth over $17 million.

The Trump budget would undermine Oregon’s coastal communities by eliminating science grants that help coastal communities maintain thriving fish stocks, restore coastal ecosystems, and protect against the effects of sea level rise and extreme weather.

The Trump budget would also undermine Oregon’s coastal communities by eliminating protection for particularly productive coastal habitats, one of which is the South Slough of the Coos Bay estuary.

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Social Services

The Trump budget would make it harder for Oregonians to meet their basic needs and get ahead.

The Trump budget would harm Oregon families with children in deep poverty trying to get on their feet by cutting funds for Temporary Assistance for Needy Families (TANF). It would reduce the funds Oregon receives by $33 million, an 18 percent decrease. About 22,000 Oregon households rely on the modest cash assistance of TANF and its employment supports to avoid homelessness and become employed.

In the Trump budget, funds to states through the Community Services Block Grant — which provides employment, education, housing, nutrition, and emergency services for low-income individuals — would be eliminated, costing Oregon almost $6 million in 2018.

The Trump budget would eliminate the Social Services Block Grant, which would otherwise provide nearly $20 million to Oregon in 2018. These funds enable Oregon to address child abuse and neglect, provide community-based care for the elderly and disabled, and help the most vulnerable residents become self-sufficient through child care assistance.

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Transportation

The Trump budget disinvests in Oregon’s transportation infrastructure.

The Trump budget cuts the federal Highway Trust Fund, which funds 25 percent of the country’s public highway and mass transit investments nationwide. Under this plan, Oregon would receive $1.2 billion less for transportation infrastructure by 2027, causing the loss of an estimated 15,000 jobs in Oregon over the period.

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