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After debate and discussion that went until 4 a.m. on Wednesday morning, the U.S. Senate has voted to advance a budget resolution that lays the groundwork for Congress to craft and enact a slate of President Joe Biden’s proposed investments known as the “Build Back Better” plan.
The Michigan League for Public Policy and our partners have championed the American Rescue Plan Act that Congress passed in March and its positive impact on our state, like reducing child poverty and better supporting residents and workers with low incomes. And we have echoed President Biden’s call to make many of ARPA’s temporary changes and their benefits to Michiganders permanent, including expansion of the Child Tax Credit and Earned Income Tax Credit, more funding for housing vouchers, continued efforts to make healthcare more affordable, and significant investment in child care.
And with the passage of this budget resolution, the Senate is taking the next, important step toward passing the transformational policies our country needs to improve lives, create a stronger, fairer economy, advance racial equity, and ensure all people can share in the prosperity of our nation.
For too long, Michigan families have been held back by racial and economic inequality. Even before the COVID-19 pandemic, more than a quarter of households nationwide—including more than one-third of households with kids and one-half of Black and Latinx households with children—were experiencing economic hardship. And throughout the health crisis, we have seen the adverse impacts that have been felt in communities of color and lower-income areas.
Michigan families with kids have also been hit hard. According to Census Household Pulse Survey data from June 9-July 5, 2021, here in Michigan, 19% of households with children had lost employment income during the previous four weeks. And as of March 2021, more than 50% of Michigan households with children had lost employment at some point during the pandemic.
But as workers and families look for relief, our state and federal tax codes continue to be significantly imbalanced in favor of big businesses and the wealthy. In 2020, 55 of America’s largest corporations paid nothing in federal income taxes, and the nation’s top billionaires saw their fortunes grow by leaps and bounds, even as millions of Americans experienced hardship during the pandemic. And Michigan is 15th in the nation for income inequality: the top 1% of earners make more than 21 times as much as the bottom 99% of workers. Even still, the bottom 20% of income earners in the state pay nearly double the rate in total state and local taxes than the top 1% of earners (10.4% and 6.2% of income, respectively).
This budget resolution creates a path toward a better future, cutting costs for families on essentials like housing, food, child care, healthcare, and school; helping workers get the help they need to make ends meet and get ahead; and creating millions of jobs.
Budget summary materials suggest the plan will also tackle our lopsided tax code to pay for the investments necessary to create that better future — specifically by asking corporations and households with incomes over $400,000 to pay their fair share in taxes. We applaud the Senate for recognizing tax fairness as a critical element to building a more equitable society.
The U.S. House of Representatives is expected to take up the budget resolution soon, and then lawmakers, legislative committees and staff will begin crafting the related legislation. We look forward to working with Michigan’s congressional members in the coming weeks to support the investments our communities need, and we urge our delegation to deliver on the bold vision laid out in this budget resolution.
The Michigan League for Public Policy contributes a biweekly “Human Capital” column to the Advance.
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