​Trump tax plan could save him millions under guise of helping small businessesThe structure of the Trump Organization makes it a prime potential beneficiary – one estimate says the tax plan will save Donald Trump $65m a year in taxes ~ Financial Times

Pages

Wednesday, June 21, 2017

​Trump tax plan could save him millions under guise of helping small businessesThe structure of the Trump Organization makes it a prime potential beneficiary – one estimate says the tax plan will save Donald Trump $65m a year in taxes

Numerous government programs have aided economic recovery for the people of Muscle Shoals. Now the man they voted for might cut them

Heavenly Grace Ministries in Sheffield, Alabama, near Muscle Shoals. The area has led the state’s economic growth, but progress is threatened by proposed spending cuts.
 Heavenly Grace Ministries in Sheffield, Alabama, near Muscle Shoals. The area has led the state’s economic growth, but progress is threatened by proposed spending cuts. Photograph: Eric Schultz for the Guardian
From the golden arches of McDonald’s to the aroma of pulled pork sandwiches at local barbecue institution Bunyan’s, the Florence-Muscle Shoals metropolitan area is, at first encounter, the quintessential American suburb.
Fast-food chains and discount stores line bustling streets of an area considered the economic hub of north-west Alabama. Unlike the working class pockets of America that have struggled to rebound from the Great Recession, this former bedrock of the textile and metal industries has labored in recent years to reinvent itself.
A modest downtown neighborhood, tree-lined and pedestrian friendly, shows signs of a burgeoning restaurant scene where local, sustainable dry-aged beef tartare is on the menu. The historic Fame Studios – a center of gravity in the 60s and 70s that drew artists such as Aretha Franklin, Wilson Pickett and Etta James to record what was coined as the Muscle Shoals sound – remains a notable tourist attraction.
While situated in the fourth poorest state in the nation, the Shoals, as it is known, has led Alabama’s economic growth despite nearly half of its manufacturing jobs crumbling over the past two decades.
But its progress has been threatened by myriad spending obstacles proposed by the very same man who north-west Alabamians overwhelmingly voted for: Donald Trump.
A budget blueprint unveiled by the White House last month was ripe with draconian cuts to federal programs that have served as a lifeline to the Shoals’ fledgling economy. If enacted, Trump’s budget would all but guarantee the closure of the area’s regional airport, scale back funding for job training, and leave the local tourism office without critical grant money.
Most crucially, Trump’s fiscal plan would eliminate two federal agencies, the Appalachian Regional Commission (ARC) and Delta Regional Authority (DRA), that invest millions of dollars annually toward boosting not simply Alabama’s rural communities but also many of the other rural states populated with the president’s most ardent supporters.
Spanning 13 states, the ARC covers a 205,000 sq mile region from the mountains of New York state to the Mississippi gulf coast. In less than two years, the ARC has poured upward of $11m into Alabama alone – including a grant of roughly $1m awarded last year to the Shoals Entrepreneurial Center, which by supporting startup companies has proved an epicenter for economic development in the region.
It might seem like a paltry amount, said Giles McDaniel, the center’s executive director, but the expected return on investment is $10m, the creation or retention of 110 jobs and the launch of 20 new businesses.
Trump, he notes, is not the first president to propose eliminating the ARC – Ronald Reagan left the commission out of every one of his budgets but was thwarted by Congress. McDaniel nonetheless acknowledges Trump sent an unexpected message to those who helped propel him to the White House.
“You had people who said, ‘Well, golly, how could Trump not include the ARC in his budget?” he said. “Those are all the states that voted for him.”

‘There’s going to be a dire need’

Although its economy has been placed on a modest but upward trajectory, one in every six people in the Shoals area lives in poverty.
Because Alabama is one of 19 Republican-led states which chose not to expand Medicaid under Barack Obama’s healthcare law, its poor residents were thrust into a conundrum: too poor to buy insurance, but not poor enough to get it from the state.
The Shoals Community Clinic, a red brick, one-story converted apartment that sits adjacent to a housing development, has provided low-cost health and dental care for the working uninsured for 20 years.
It was born from precisely the kind of coverage gap in healthcare that the Affordable Care Act’s Medicaid expansion sought to resolve. Often, uninsured Americans used emergency rooms for primary care, racking up bills they would never pay at local hospitals.
Funding for the the Shoals Community Clinic comprises a combination of private donations and support from local hospitals, but also dollars from the ARC and community block grants Trump has also proposed to eliminate.
“There’s going to be a dire need,” said Bonita McKay, the clinic’s executive director. “Eventually things will break down and we won’t have money to replace it. That’s when we’ll have to start cutting back on services and just try and make do with what we have.”
The ARC gave the Shoals clinic $112,709 to upgrade dental equipment in 2011. The local housing authority provides the clinic with its location, worth $11,000 in 2015. That grant program would also be axed in Trump’s budget, as would $403m to help train new nurses. Locally, nursing students supply the Shoals clinic with labor, as the clinic helps them fulfill clinical hours needed to graduate.
At the same time, Trump has backed a Republican plan to repeal and replace the healthcare law that would cut Medicaid spending by $880bn and cut federal assistance to buy private health insurance, leaving more people in northwest Alabama uninsured and in need of care from the Shoals Clinic.
“That was one of the reasons for starting this clinic – to keep people out of the ER,” said McKay. “That keeps costs down for everyone, but it seems what they’re proposing would create that same problem all over again.”

Fame Recording Studios, which made famous the ‘Muscle Shoals sound’.
Pinterest
 Fame Recording Studios, which made famous the ‘Muscle Shoals sound’. Photograph: Eric Schultz for the Guardian

As she speaks from a wooden desk in a corner office, patients fill the waiting room on a muggy Wednesday morning. The clinic sees roughly 1,000 patients a year for both illness treatment and preventative care at a fixed price.
Among them is Janice, a middle-aged woman who asked to only be identified by her first name. The clinic, she said, was “a godsend” for most of the people in the area.
Janice would not have envisioned a life without health insurance.
Just over a decade ago, she and her husband belonged to Florida’s middle class, who were typically insured through their employers. They bought a luxurious house and seemed to be living the American dream, but fell victim to the housing crash. The couple relocated to Alabama so that Janice’s husband could help his aging father, but the poor job market left both of them unemployed and without health insurance.
“We lost everything we had,” she said, her voice trembling.
They got word of the Shoals clinic, where her husband underwent tests that eventually led to his diagnosis with blood cancer.
“He would have probably died if he had not been able to come here,” Janice said.
Asked about the potential impact of Trump’s proposed cuts to the clinic and greater Shoals area, Janice confessed her husband supported the president.
“I told him, you realize you may end up uninsured and dead because you voted for him?” she said. “But it doesn’t seem to matter.”

‘Trump probably didn’t know what the commission did’

It’s a familiar trend among many of those who oversee the local projects and services that would be gutted by Trump to be reticent to discuss their politics.
The billionaire, whose brash persona stands in contrast with the devout evangelical inhabitants of the American south, carried the surrounding county 67.9% to Hillary Clinton’s 29.6%. Overall, he won the reliably conservative Alabama by just over 28 points.
Trump returned to the state as president-elect in December as part of a victory tour to rally his base – his 757 plane bearing his name landing at the Mobile regional airport.
As with much of rural America, remote communities across Alabama rely on smaller local airports that would also be dealt a blow under Trump’s budget proposal.

A flight prepares to depart the Shoals airport, which sees a few regional flights a day.
Pinterest
 A flight prepares to depart the Shoals airport, which sees a few regional flights a day. Photograph: Eric Schultz for the Guardian

The Muscle Shoals Airport ranks among those that receives a subsidy under a federal program known as the Essential Air Service (EAS) – established by the Department of Transport to ensure regular flights in and out of isolated communities across the US.
The airport faced struggles in recent years that led to a drop in passengers. But a $2.8m subsidy from the EAS has meant that a total of 24 flights a week can operate to and from Nashville and Atlanta.
Barry Griffith, the airport’s director, said he hoped Trump could be persuaded by congressional lawmakers to rethink reduction in communities eligible for the subsidy.
“He has mentioned several times that he’s interested in airport infrastructure and funding,” Griffith said, while adding of the potential impact: “Having an airport is like the doorstep to economic development in your entire community.”
Trump’s budget director, Mick Mulvaney, has forcefully defended the plan as acting on the administration’s vow to upend Washington. Mulvaney, a longtime spending hawk who founded the conservative Freedom Caucus in the House of Representatives, confessed to being the one who urged Trump to place the ARC on the chopping block.

Barry Griffith, Shoals airport director: ‘Having an airport is the doorstep to economic development.’
Pinterest
 Barry Griffith, Shoals airport director: ‘Having an airport is the doorstep to economic development.’ Photograph: Eric Schultz for the Guardian

“My guess is he probably didn’t know what the Appalachian Regional Commission did,” Mulvaney said. “I was able to convince him.”
But the White House is expected to face resistance from members of Congress, including those within the Republican party.
Senate majority leader Mitch McConnell has signaled the ARC will not be eliminated under his watch. His home state of Kentucky is not simply a beneficiary but in many ways embodies, through the decline of the coal industry, Appalachia as a symbol of the white working class.
There have been signs Trump is losing his grasp of that core constituency with a historically low approval rating during his first three months in office.
But in northwest Alabama, voters like Marsha Jeter remain faithful.
“We needed someone in office that cannot be bought,” she said.
“I think he will bring back jobs, and I truly believe he wants to make America great again.”

Share

Twitter Delicious Facebook Digg Stumbleupon Favorites More