What is in Build Back Better and How Does it Help Montana?

President Biden and Congress recently unveiled the latest version of the federal recovery package, coined the Build Back Better plan. This package represents a significant investment in Montana communities, geared toward expanding economic opportunity and lowering costs for families and workers. Historic investments in child care, preschool, school nutrition, and the child tax credit will help lift millions of children from poverty. The Montana Budget & Policy Center will continue to update this page with information on key components of this package.

Child Nutrition and Child Tax Credit

Housing Affordability

Child Care

Congress has also set out a plan to pay for these new investments. The revenue framework for the federal reform plan will raise nearly $2 trillion over the next decade from the richest Americans and large, profitable corporations.

Many of our large, profitable corporations are paying no federal income tax. The package will fix that by ensuring that corporations with profits in excess of $1 billion pay a minimum tax of 15 percent on the profits they report to their shareholders. The plan also imposes a 1 percent surcharge when a corporation buys back its own stock – a scheme often used to shift profits to shareholders without paying dividends. The framework also addresses offshore corporate profits with a 15 percent minimum tax.

Our wealthiest individuals are also paying much less than they should in federal taxes. A much-needed high wealth tax will help ensure those with the most begin to pay their share with a surtax on incomes above $10 million. Lastly, the plan targets staggering tax avoidance at the top by increasing IRS funding to improve tax collections of taxes already due and avoided by the wealthiest.

We have a once-in-a-lifetime opportunity to address Montanans’ challenges and create a better country for everyone. We can make housing affordable, make it easier to raise a family, make sure everyone has good food to eat, and make sure seniors can stay in their homes. And we can afford it with policies that impact only the wealthiest. It is possible if Congress acts now.

Make your voice heard by contacting Senator Tester here.

The Data is in: Families are Spending their Child Tax Credits on Basic Needs

We’ve written before about how the expanded Child Tax Credit (CTC) is a historical step in lifting children out of poverty. But new data released from the U.S. Census Bureau can help us better understand how families use the expanded tax credit to meet their basic needs.

First, a quick recap about what the expanded CTC is: 

The CTC has long been part of our tax code. This past summer, Congress increased and expanded it to help families recover from the pandemic and address the cost of raising children. Congress increased the benefit amount, included 17-year-olds, and allowed families living on the lowest incomes to receive the full benefit for the first time. Families receive $250 a month per child aged 6-17 and $300 a month for children under 6.

Over 209,000 children qualify for the credit in Montana. The expansion is projected to reduce childhood poverty in the state by 45 percent a year if made permanent. For more information on how the expanded CTC works, be sure to read our blog post here.          

New Data Shows Families in Montana are using CTC to meet basic needs.

Since the summer of 2020. the U.S. Census Bureau has been conducting the Pulse Survey to measure the effects of the pandemic on households. Recently, the survey has asked households with children how they have spent their credits.

Data from July through September shows us that families in Montana used their first two CTC payments to meet basic needs, including food, clothing, rent, and utilities.

Here are some important takeaways from the data:

  • Nearly half (44%) of all families are using their credit on food for their household.
  • 3 out of 5 families spent their credits on basic needs and/or educational expenses regardless of their income.

For families living on less than $35,000 a year, the credit is even more essential. Here’s how families living on low incomes used their credit:

  • Food  65% of families spent their credit on food.
  • Utilities – 40% of families used their credit on utility bills.
  • Educational expenses – 34% of families used their credit on educational needs, including after-school care.Clothing – 32% of families used their credit on clothing.
  • Rent or mortgage – 29% of families paid rent or their mortgage with their tax credit. 
  • Basic needs and educational expenses – 4 out of 5 low-income families used their credit on basic needs and/or educational expenses. 

The tax credit also helps families afford to work.

In Montana, ten percent of families, and 17 percent of families with children under the age of 5, used the credit to pay child care expenses. The coronavirus pandemic has forced many parents, especially mothers, out of the workforce, due to health concerns, school closures, and a lack of affordable child care. For families who need child care to work, the credit helps make work accessible.

Congress should make the expanded CTC permanent.

This new data from the Census Bureau demonstrates how much families need this additional support. When families can afford rent, food, and other necessities, children ultimately do better. Congress should make the expanded CTC permanent and continue this historic victory against childhood poverty.

MBPC Opinion Editorial: It is time to make billionaires pay their fair share

Billings Gazette and Helena Independent Record

A fair economic recovery is possible and affordable. It’s time for billionaires and corporations to chip in.

In Washington, Congress is debating how to help families get back on their feet after a challenging 18 months. However, with so many Montanans still struggling, we cannot afford to return to the way things were. We need to move forward to something better.

While businesses are grappling with the fallout of the global health pandemic and economic downturn, many families know that this crisis has merely laid bare the barriers they have long faced. Rising housing costs and the pressure of balancing caring for family — both young and old — have made it nearly impossible to earn enough to make ends meet. Investments in child care, affordable housing, and home- and community-based services will help people return to work and build a future for their families. They will also foster the workforce that businesses need to get back up and running.

Congress has the opportunity right now to fund these and many other critical investments by ensuring the wealthiest Americans pay their fair share in taxes. Currently, our federal tax system is riddled with loopholes that benefit the wealthiest households and corporations at the expense of investments in the rest of us. Lopsided tax cuts enacted in 2017 made the tax code even more unfair, showering the wealthiest with additional, excessive perks. In 2020, the richest 20 percent of Americans received nearly three-fourths of the tax cuts, costing our country $205 billion. Congress’s plan would make sure the richest 1 percent are paying their fair share.

Making matters worse, the top 1 percent of earners avoid $163 billion in taxes every year. A recent investigation exposed how the country’s wealthiest individuals pay far less than they’re supposed to in federal income taxes. Simply improving tax collections of taxes already due and avoided, mainly by the wealthiest, would add $1.6 trillion in revenue over the next decade.

It is long past time to make a change. Congress should do what’s necessary to ensure billionaires can’t use loopholes and other tactics to avoid paying income taxes on their fortunes.

Congress’s plan would make sure people like Jeff Bezos are paying their fair share. The proposed individual income tax changes would require the richest 1 percent to pay for 97 percent of the tax increase, which will start to address inequities in America’s tax system. And when paired with increases in the child tax credit and the earned income tax credit, these improvements will help families with the lowest incomes – who are often left out of tax reform.

What’s more, a recent study by the Institute on Taxation and Economic Policy found that at least 55 of the nation’s largest companies paid no federal corporate income taxes in 2020. The current plan being discussed by Congress calls for increasing the corporate income tax rate for companies with over $5 million in annual profits and lowering the rate for small corporations with income below $400,000. The proposal also helps level the playing field so small businesses can compete by limiting the amount of taxes avoided by multinational corporations that shift income overseas.

Corporations and the wealthiest have been getting a special deal for too long. Congress should reduce our tax code’s inequities. Most importantly, it should make the investments needed to ensure everyone is included in our economic recovery. Congress has a historic opportunity to close offshore tax haven loopholes, make billionaires pay their fair share, and go after tax cheats. And with new investments in child care, education, and housing, we can make sure all Montanans can thrive.+1 

Rose Bender is Deputy Director of Research and a Senior Fiscal Policy Analyst with the Montana Budget & Policy Center – a nonprofit organization focused on research and advancement of public policies that help families living on low incomes.

Guest opinion: Make billionaires pay their fair share

Billings Gazette and Helena Independent Record

A fair economic recovery is possible and affordable. It’s time for billionaires and corporations to chip in.

In Washington, Congress is debating how to help families get back on their feet after a challenging 18 months. However, with so many Montanans still struggling, we cannot afford to return to the way things were. We need to move forward to something better.

While businesses are grappling with the fallout of the global health pandemic and economic downturn, many families know that this crisis has merely laid bare the barriers they have long faced. Rising housing costs and the pressure of balancing caring for family — both young and old — have made it nearly impossible to earn enough to make ends meet. Investments in child care, affordable housing, and home- and community-based services will help people return to work and build a future for their families. They will also foster the workforce that businesses need to get back up and running.

Congress has the opportunity right now to fund these and many other critical investments by ensuring the wealthiest Americans pay their fair share in taxes. Currently, our federal tax system is riddled with loopholes that benefit the wealthiest households and corporations at the expense of investments in the rest of us. Lopsided tax cuts enacted in 2017 made the tax code even more unfair, showering the wealthiest with additional, excessive perks. In 2020, the richest 20 percent of Americans received nearly three-fourths of the tax cuts, costing our country $205 billion. Congress’s plan would make sure the richest 1 percent are paying their fair share.

Making matters worse, the top 1 percent of earners avoid $163 billion in taxes every year. A recent investigation exposed how the country’s wealthiest individuals pay far less than they’re supposed to in federal income taxes. Simply improving tax collections of taxes already due and avoided, mainly by the wealthiest, would add $1.6 trillion in revenue over the next decade.

It is long past time to make a change. Congress should do what’s necessary to ensure billionaires can’t use loopholes and other tactics to avoid paying income taxes on their fortunes.

Congress’s plan would make sure people like Jeff Bezos are paying their fair share. The proposed individual income tax changes would require the richest 1 percent to pay for 97 percent of the tax increase, which will start to address inequities in America’s tax system. And when paired with increases in the child tax credit and the earned income tax credit, these improvements will help families with the lowest incomes – who are often left out of tax reform.

What’s more, a recent study by the Institute on Taxation and Economic Policy found that at least 55 of the nation’s largest companies paid no federal corporate income taxes in 2020. The current plan being discussed by Congress calls for increasing the corporate income tax rate for companies with over $5 million in annual profits and lowering the rate for small corporations with income below $400,000. The proposal also helps level the playing field so small businesses can compete by limiting the amount of taxes avoided by multinational corporations that shift income overseas.

Corporations and the wealthiest have been getting a special deal for too long. Congress should reduce our tax code’s inequities. Most importantly, it should make the investments needed to ensure everyone is included in our economic recovery. Congress has a historic opportunity to close offshore tax haven loopholes, make billionaires pay their fair share, and go after tax cheats. And with new investments in child care, education, and housing, we can make sure all Montanans can thrive.+1 

Rose Bender is Deputy Director of Research and a Senior Fiscal Policy Analyst with the Montana Budget & Policy Center – a nonprofit organization focused on research and advancement of public policies that help families living on low incomes.

Broadband: Expanding the Digital Road in Indian Country

For decades, quality access to the internet has been important for businesses, schools, and communities. However, the global pandemic has made apparent the stark difference in access -particularly in Indian Country. Broadband is a digital road, and like most roads, they take us to places like work, school, the doctor, and stores. They also bring important goods and services into a community. The past year has dramatically increased our reliance on these digital roads. However, for Indian Country, barriers exist, and much of Indian Country has lacked the funding for broadband infrastructure. These challenging times brought a push and opportunity for funding which will be critical for Indian Country to build for the future.

First, it is essential to understand what broadband means. The term broadband refers to high-speed internet access that is always on and faster than traditional dial-up access. A recent national survey by HighSpeedInternet.com showed the net result of Montana on average having the slowest internet of all states, with roughly half the speed of the national average. Broadband access depends on many factors, including whether you live in a rural or urban community. Rural areas, especially tribal lands, lack broadband coverage the most.

Tribal lands often present significant obstacles to implement broadband and are expensive to serve. These challenges on tribal lands include rugged terrain, complex permitting processes, jurisdictional issues involving states and sovereign tribal governments, lack of the necessary infrastructure, and a majority of residential rather than business customers. Higher population density and more business customers incentivize broadband providers to invest in urban communities where they will receive more returns versus spending hundreds of thousands of dollars to serve a few customers in a rural area. With 84% of tribal citizens living in rural and small-town areas of Montana, these populations are more directly impacted by inadequate speeds and access to broadband coverage.

Fortunately, there is some hopeful news.

The federal American Rescue Plan Act (ARPA) brought significant funding to Montana. The legislature set up interim committees to appropriate more than $2 billion in federal funding through HB 632 and designating $275 million of that funding for broadband-related projects. The funding from HB 632 will work through SB 297, creating a grant program to award broadband providers with funding to deploy broadband projects in frontier, unserved, or underserved areas. Tribal and local governments may partner with broadband providers to fund these projects.

Previously, in February 2020, the Federal Communications Commission opened a six-month period in which federally recognized tribal nations or Alaska Native Villages could apply for a broadband license to provide broadband service on tribal land. In Montana, seven out of eight tribal governments received a license. Previously tribal nations had to compete against giant internet service providers with vastly larger capital and staff with technical skills in bidding for the license.  Tribal governments can lease these licenses. However, having their own license and managing their own infrastructure will mean adding high-skilled, high-paying jobs in their communities. Tribal nation’s autonomy over spectrum licensing strengthens tribal sovereignty by increasing the authority of tribal nations to manage their internet just as they would a natural resource, like water or mineral rights. While tribal governments expect to receive these licenses and some federal funding, it is still only a fraction of what is needed to cover all the costs. That is why state funding from SB 297 is a critical component to make this plan a reality.  

Broadband is an essential part of infrastructure interconnecting all other industries. Every industry relies on computing, cloud storage, or other digital equipment to sell goods and services. In a pandemic that is disproportionately impacting Indian Country, accessing the internet has become increasingly vital for maintaining and improving essential things like physical and mental health outcomes, employment rates, school enrollments, and social connections. The necessity for broadband is overwhelmingly clear as we continue onto this road into the future —a road towards investment, equity, and development in Indian Country.

Check out the MT broadband deployment task proposal here.