why the new state tax rules will have no effect, other than harming poor people. oh, and old people.Posted: January 4, 2012
That’s a mouthful, but whatever. More importantly, the new Michigan state tax rules going into effect in this month just plain suck. A lot. Governor Snyder and the Republican Senate pushed through tax reforms that will do a few things:
- Most Michigan companies will see a lower tax or no tax in 2012.
- Low income workers will see cuts of up to 70% in EITC (Earned Income Tax Credit).
- Retirees with pensions will now see their pensions taxed.
My response is two-fold. First, the low-hanging fruit: another misleading headline! This article is entitled “New State Tax Rules Good For Business.” Well, actually, according to the report cited in the same (SAME) article, the headline is refuted. The article cites nonpartisan Citizens Research Council, an objective Michigan think tank that publishes reports on issues pertinent to Michigan policymakers. Oh, and they’ve been at it for 90 years:
“The nonpartisan Citizens Research Council concluded in a July report that the business tax cut likely will have a positive effect on business investment and Michigan’s reputation in the business community. But it sees potential pitfalls as individuals pick up the tab through higher income tax payments, reducing their ability to spend in ways that would spur the economy.
“Because of the offsetting nature of these effects, any overall effect on growth, positive or negative, is likely to be small,” the report concluded.”
For some reason, the outcome of this tax reform, that consumers will have less to spend and will offset any business tax cuts to have NO EFFECT, is buried in the article and missing from the headline.
Media responsibility aside, what’s more is that this vital point is also buried in the policy debate. Citizens whose public sector jobs are gone or whose pensions are now taxed have that much less money in their pockets with which they can buy the goods and services that these businesses produce. Not only is the outcome problematic, essentially encouraging no growth in Michigan’s economy, but these tax cuts are unnecessarily unfair, in some cases downright cruel, to the middle class. In order to give businesses tax cuts, Michigan citizens will see their tax credits lowered from approximately $400 to $100. Retirees will now pay taxes on pensions they thought they could count on being untaxed. Talk about uncertainty, Republicans!
Except. Well. The most-read news story is not actually news. It’s opinion. That Rick Snyder ‘made a misstep’ is a normative statement, conveying not the facts, but what you should think of the facts.
I am whining about how society gets their news (if they get it at all). Nothing new. Probably irreversible. But to counter normativer with normative, shouldn’t the bottom story be the top story?
The city of Troy has an atrocious track record. In the past ten years, council members denied a vote to host an Ikea in Troy, reasoning the big blue box was an eyesore in a town of strip malls. Under its poor management, Troy has made national news for being a wealthy city considering doing away with its public library.
In its most recent in a string of abysmal decisions, the Troy City Council is delaying a vote to bring a transit center to the city. The project, slated to connect already existing train lines that go between Chicago and Southeast Michigan, will be supported by $8.5 million in federal funds.
However, Troy, yet again, does not get it.
“How do you justify taking $8.5 million from a government that is trillions of dollars in debt?” Janice asks.
Easily. You have to spend money to make money. The government spending money on this project will do a lot to make money for its citizens. And this is good for everyone, because citizens who have money can spend more money. They can afford health insurance, they can pump money into an economy that needs it. In a similar project done in Normal, Illinois another city not exactly the epicenter of public transport, a similar investment furnished $200 million in private investment and 375 jobs.
The Detroit Free Press has it right when they argue that this issue is about more than Troy. Troy’s inability to see the bigger picture, whether that would be t
Troy has a track record of turning down job-creating policies and degrading the public investments that attract residents and keep them. Mistaken ideology, Janice, should not get in the way of a pragmatic policy to help residents needing jobs in your city.
The Detroit City Council, by a vote of 6 to 2, voted to not touch their allotted $700,000 per year budgets for office expenses amidst their calls for further concessions from unions and a cut to the mayor’s budget.
If Michigan Governor Snyder needed any affirmation to his decision to begin the review process ultimately leading to an emergency manager for Detroit, then the City Council may as well have raised their hands for an emergency manager in the same way that they voted.
The council members argue that they’ve taken 10% cuts for the past three years. So, too, have city businesses, city workers, city residents, and the constituents who they serve. This is not a time for exceptions, this is a time for the city council to show solidarity by giving up the same cell phones, city cars and perks that their constituents have already done without.
Detroit, this move boils down to how to cast your ballot in for the next city council elections.
Vote for: City Council President Pro Tem Gary Brown and Councilwoman JoAnn Watson.
As for the rest?
I’m taking suggestions. I’m sure there’s a cushy board position around there somewhere. Maybe check out vacancies at Metro Airport?
Michigan is notorious for really truly awful roads, the kind of roads that much poorer nations would shake their heads at, the kind of roads that eat cars with their pothole mouths.
State Representative Rick Olsen (R-Saline) and Roy Schmidt (D-Grand Rapids) released a report today entitled “Michigan’s Roads Crisis: What Will it Cost to Maintain Our Roads and Bridges?” calling for $1.4 billion to repair crumbling infrastructure (excluding those bridges that have yet to exist that CANADA WANTS TO PAY FOR obvi).
A few preliminary questions:
1. How are funds prioritized? Please tell me these funds are more oriented toward roads that people use… like not just to middle-of-nowhere destinations that won’t do a whole lot to ease the burden on businesses (I’m looking at you East Jordan, Michigan).
2. A news article on the document indicates that the costs will go up to $2.6 billion per year by 2023 to make basic improvements. What?? Why the drastic increase?
The document is found here. I’ve started searching for a few of these answers, and will follow up with more complete analysis, but really, I’m betting $10 that this graph, found on like the third page, explains 90% of this predicament.
Next question: What happened to Michigan Gasoline Tax Revenue?