The 2018 Budget and Tax Reform

The 2018 Budget and Tax Reform

James E. McDonald.

You need to pay attention to what is going on in D.C. With so much focus on the Russian collusion matter, it’s important our citizens stay informed about what’s happening in Congress on the federal budget and tax “reform” issues.

As to the proposed Trump budget, if enacted, it will have an impact here in Pinecrest. For example, federal dollars funded Pinecrest’s Safe Routes to School program in 2016 which provided for infrastructure improvements around Palmetto and Pinecrest elementary schools.

With a focus on safety, the project included updating traffic signals to new standards, solar powered pedestrian crossing flashers and pedestrian crossing countdown signals.

This program was administered by the Florida Department of Transportation. It is just one of many federal programs that are at risk of being eliminated that keep our residents safe, educate our youngest constituents and continue to support families and help small businesses excel.

Released in May, the administration’s budget plan for 2018 proposes to eliminate dozens of federal programs and billions in funding for America’s municipalities. Some of the largest cuts in spending include 31.4 percent or $2.5 billion less for the Department of Environmental Protection, 13.5 percent or $9.2 billion less for the Department of Education and 12.7 percent or $2.4 billion less for the Department of Transportation. On a local level this affects much needed funding for sustainability initiatives such as weatherization of homes, the maintenance and improvement of our public schools and public transit, to name a few.

I represent the Village as the Vice Chair of the National League of Cities Transportation and Infrastructure Services Committee and know first-hand the important role federal funding plays in helping municipalities and counties succeed. As a municipal leader, I’m standing together with more than 19,000 fellow municipal leaders to represent our community and ensure the federal government understands the needs of our municipalities and residents.

Most people do not want a tax reform that is nothing more than the latest recycling of “trickle down” economics, a disproven theory.

While it is being sold as tax reform, its main focus is reducing the tax rates on corporations and high income earners. It should be noted, as I write this article that legislation is being drafted in secret by the Republicans in the House without benefit of public input, so my comments are based on what’s publicly known.

A 2015 study by the International Monetary Fund (IMF) concluded that an increase in the income of the wealthiest people actually leads to a decrease in gross national product. The benefits just do not trickle down to the middle and working classes. However, this belief has been at the center of US conservative economics for the past 30 years.

In late October, the House narrowly approved the $4 trillion Fiscal Year 2018 Senate Budget Resolution which includes reconciliation instructions that remove the threat of filibuster from forthcoming tax reform legislation. While the resolution is non-binding, it contains language that further threatens the deductibility of state and local taxes and clears the way for party-line passage of tax reform. In response to the resolution, National League Cities (NLC) President Matt Zone, councilmember, Cleveland, Ohio released the following statement:

“Today’s vote is a thinly veiled attempt to open the door for elimination of the state and local tax (SALT) deduction over bipartisan objections in Congress. We remain deeply concerned that Congress continues to pursue an ill-advised attempt to pass tax reform solely on party-line votes while passing the cost onto cities and middle class Americans. This budget resolution sends a message to cities that they are expected to continue doing more with less. Any budget plan that truly claims to grow the American economy must invest in cities, so we will continue to send a strong message back to Congress and the Administration: WALT and the tax exemption on municipal bonds are nonnegotiable.”

The time is now for voters in Pinecrest to let our US Senators and members of Congress know that we demand a bipartisan effort to pass a budget that meets the nation’s needs and to reform the tax code to make it fair for everyone, while not increasing the deficit in the process.

We can’t afford to go backward in communities like ours. It’s up to Congress and the President to find a better way to spend wisely and invest in our future. I hope you’ll stand with me.


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