In an apparent attempt to pander to voters, the Michigan Legislature is rushing to pass an election year income tax cut. This is a little baffling, because the voters don’t want one.
The state has a budget surplus – on paper, anyway – of a little less than a billion dollars. Two weeks ago, an EPIC-MRA poll found only 11% of the voters thought a tax cut was a good idea. The rest were divided about evenly between those who wanted it to go to schools and those who want it to go to our roads.
You would think that would be that.
Especially since Gov. Snyder doesn’t want an across-the-board tax cut, but wants one aimed at those who need it most, those “hardworking Michiganders who get up every day and pack their lunch and go to work.”
But there was a fallacy behind this poll: That’s an assumption that lawmakers, like Macomb County State Sen. Jack Brandenberg, care what voters want.
They don’t.
They care what rich campaign contributors want, and they want to appease Tea Party fanatics so they don’t challenge them in the August primary.
The Michigan Constitution, by the way, outlaws graduated income taxes, so any income tax cut has to be the same for the richest and the poorest people.
Earlier this week, the folks at the Michigan League for Public Policy did some calculations on what the income tax rollback Brandenberg wants would mean.
... the famous one percent would get an average yearly tax cut of more than $2,600, enough for a trip for two to Paris.
They then expressed that vividly, this way. As the League’s Judy Putnam put it, the lowest fifth of income earners would see an annual tax cut of about $12, or about enough to buy a cherry pie at a bakery. Those in the middle would get an average tax cut of $88, which wouldn’t even fix a blown tire.
However, the famous one percent would get an average yearly tax cut of more than $2,600, enough for a trip for two to Paris. Meanwhile, the state would have even less money for roads and schools.
The governor wants instead some kind of minimal targeted homestead tax credit which would largely help seniors. But there is a simpler way of cutting taxes that would help the people who really need it and the state’s economy.
Three years ago, our lawmakers slapped a big tax increase on Michigan’s working poor, by cutting the Earned Income Tax Credit, usually known by its initials, EITC. This is not welfare, but something for working families, designed to offset other taxes that disproportionately fall on the poor.
Cutting it amounted to almost a $600 tax increase on a family of three scraping by a minimum wage salary.
Restoring the tax credit would lift something like 12,000 Michigan children out of poverty, the League estimates.
This would be the one rational way to help this state and cut taxes.
Plus, this extra income would quickly be spent by those who have it in their communities. That would help create jobs and stimulate growth, especially among small businesses.
This would be the one rational way to help this state and cut taxes. And the outrage is that none of our elected leaders, even those from urban areas, are making this an issue.
Sometimes, I think that maybe they, indeed, really don’t care.
