A recent report by the Tax Foundation says that Michiganders will see an average tax cut of over $3,000 due to the passage of the federal megabill, called by some a ‘Big, Beautiful Bill’. This is a clear case of misrepresenting data in an effort to make an awful bill seem palatable to Michigan residents.
As a former advisor to two Michigan governors and a retired professor of economics at Michigan State University, we know the value of being transparent when it comes to data. Accurate numbers and data have been crucial to us during our careers, and with the work we do on the Board of the Michigan League for Public Policy. Numbers help tell the story of Michigan’s people and its economy, and help guide decision-makers to make choices about what really matters.
Decision-makers need the real numbers. The use of a statewide average in the case of the Tax Foundation report cited by U.S. Representative Tom Barrett recently is highly misleading, as it is skewed by huge tax cuts for the rich. This is a simple case of failing Statistics 101, where we learn that averages can be very deceptive. For example, take a company with 10 employees. Nine of these employees make $35,000 a year and one earns$2 million a year. The average income of those working for this company is $231,500 a year, but the average hides the real story.
Like the employees in this example, most Michiganders won’t see much in the way of tax cuts. The vast majority of households in Michigan will see far less than the statewide average cut. According to the Institute on Taxation and Economic Policy, the median Michigander will see an average tax cut of only $420. Michiganders with the lowest income – who make less than $21,900 a year – will actually pay $60 more in taxes than they do today. But Michiganders in the top 1%, those making more than $715,800 a year, will see a windfall tax cut of $24,850.
The real numbers make clear that the richest Michiganders and most profitable businesses will benefit tremendously, while the rest of us get left out of the story.
The cut for Michigan’s middle class only pays for about two weeks of childcare. But the tax cut for the top 1% covers nearly a year of tuition, room and board at Michigan State University.
Hundreds of thousands of Michiganders stand to lose access to vital health care and food assistance, in order to pay for the tax cuts. The harmful policy choices in the bill will raise costs for families and make it harder for them to make ends meet. Many families will be worse off because of these changes, with higher costs for health care and groceries far outweighing any benefits from the tax cuts.
Based on an analysis by the Budget Lab at Yale, the combined impacts of the megabill and tariffs will leave all but the wealthiest 10% of American households worse off. American households, and especially households with the lowest incomes, will pay more so that the wealthiest can enjoy a huge boost in their after-tax-and-tariff income. Most Americans—and most Michigan households – will end up paying more for their health care, groceries, utilities, and other daily needs, and the tax cuts they receive won’t be enough to make up for these costs.
Because of the megabill, more Michiganders will become sicker, families will go hungry, and our grocery stores, health providers, and hospitals will all struggle. All to provide tax breaks to wealthy Michiganders and profitable corporations. This must not be the end of our story.
Bill Rustem is a former advisor to Gov. William Milliken, former director of strategy to Gov. Rick Snyder and retired president of Public Sector Consultants. Charles Ballard is professor of economics, emeritus, at Michigan State University.
This article originally appeared on Lansing State Journal: Rustem, Ballard: ‘Big, Beautiful Bill’ benefits wealthy, not working class families
Reporting by Bill Rustem and Charles Ballard / Lansing State Journal
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