Ann Arbor area lawmakers divided as Michigan House approves Gov. Rick Snyder's controversial tax plan
Gov. Rick Snyder's plan to overhaul the state's tax system has divided Republicans and Democrats inside the state's Capitol in Lansing.
Ryan J. Stanton | AnnArbor.com
Republican Gov. Rick Snyder is scheduled to address the University of Michigan's 2011 graduating class during commencement on Saturday and protests are planned. Irwin said he'll be joining students to celebrate their graduation and underscore the importance of education.
Jeff Irwin
While Snyder's budget has yet to be voted on, his controversial tax plan — which includes a $1.7 billion business tax cut while raising taxes on retirees and low-income workers — passed by a vote of 56-53 in the House on Thursday.
Republicans hailed the plan as critical to the reinvention of Michigan, something Snyder has talked about since before taking office in January. They argue the plan, once approved by the Senate and signed by Snyder, will simplify the state's tax structure to increase Michigan's economic competitiveness.
"Michigan’s current tax structure has been an impediment to job creation and growth for far too long," Snyder said in a statement. "It lacks the certainty, fairness and simplicity that job providers seek. By stepping up to the plate and passing this initiative, the House sent a clear message that Michigan is serious about putting families back to work."
But Democrats, including Irwin, blasted the GOP for approving the plan, calling it an unfair shift in the state's tax burden from corporations to individuals.
Rick Snyder
The House-approved legislation revises Michigan's tax structure and replaces the Michigan Business Tax with a 6 percent corporate income tax. It eliminates state business taxes for about 95,000 companies, while a remaining 40,000 would pay the new flat rate on corporate profits.
Those tax breaks are to be funded in part by a new tax on retiree pensions and by eliminating a number of personal and business tax credits. The House-approved plan replaces the Michigan Earned Income Tax Credit — which currently provides an average $430 benefit to low-income workers — with a $25 per-child tax credit, a change expected to affect nearly 800,000 families.
Mark Ouimet
"As difficult as my vote was, I wholeheartedly believe we've made the correct decision to bring more prosperity to Michigan and jobs to Michigan families," Ouimet said.
Rep. Rick Olson, a Republican from Washtenaw County's York Township, said he also saw the plan as being necessary for job growth in Michigan.
"One of the things we keep hearing is how we're giving tax breaks to big business, but what we're really doing is eliminating the double taxation of 'moms and pops' that have true intent to hire more people and help grow their communities right here at home," Olson said.
But many Democrats said it seemed Republicans were reneging on their no-tax pledges by backing what some consider the largest tax increase on individuals in the state's history. Irwin chalked it up as an 82 percent tax break for corporations with no guarantee of new jobs.
"That is not just a corporate tax cut — that is eliminating corporate taxes essentially. It's not right for our future," Irwin said. "There were so many bad parts of this bill that I couldn't even finish my speech on the House floor because the speaker had to stop me."
The House-approved plan exempts all pensions from taxes for those born before 1946, while those born between 1946 and 1952 would be taxed at 4.35 percent on any pension income above $20,000 for singles and $40,000 for joint filers. All Michigan residents born after 1952 would be fully taxed on their pensions under the plan.
David Rutledge
"This is not about trying to maintain the status quo," he said. "One of the main reasons I ran for office was to help make the structural reforms Michigan needs to move forward. But this plan balances the budget on the backs of low-income and working families, retirees, and children, while giving businesses a $1.7 billion tax cut. This is not fairness, this is not 'shared sacrifice.'"
Rutledge and Irwin pointed out the legislation reduces or eliminates many tax incentive programs, like Michigan's film credits and historic preservation and brownfield credits. Irwin said he's particularly upset about getting rid of charitable giving credits that benefit homeless shelters and food banks.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.
Comments
cette
Sun, May 1, 2011 : 1:50 a.m.
Many of those compromises you name are not such big compromises. Pensioners will get taxed going forward, and the film credits were drastically reduced, and the $25 dollars per kid is an embarrassment of a proposal. The idea of dropping income tax at this point was surreal. It seems to me Snyder decided to become governor to get rid the state of the MBT. Will it sput growth? Not likely, that's 1.8 dollars of cost with no proof of performance. Maybe it won't drag growth, and that is different. But right now there's real money coming into the state's coffers and that's with the MBT in play, so it's an empty argument for me. But between the singleminded quest to remove the MBT, the defunding of the schools with the financial pressures they already face, the lack of true reform for school pensions, and the attempt to tax pensioners who never saw this coming during the campaign during governorship, I believe Rick Snyder is a blundering politician, tin-earred to any constituents except small business. He's not just inexperienced, but uncomprehending of the bigger picture. The problems going on are not just union problems. He's kidding himself if he thinks this is good civil governance. This is incompetence.
DonBee
Sun, May 1, 2011 : 4:58 a.m.
cette - And he has good partners in lobbyests, the Republicans, the Democrats and the other folks who are residents of Lansing and multi-generation members of the political class. Oh, yes he does, great partners who are civil, helpful, and looking out for the general welfare of the citizens of the state of Michigan. They have at their disposal billions and billions of dollars of Federal money brought to the state by our Supercalifragilisticexpialidocious Congressional delegation in Washington. Oh, yes the Governor has a great support network. There is plenty of blame to go around, starting a couple of decades ago and moving forward. Good Luck Michigan
AMOC
Sat, Apr 30, 2011 : 4:32 p.m.
Cette - The problem is not Michigan's business or corporate tax rate, it was the value-added tax structure which required all businesses to do a lot of record-keeping not needed under other systems, and also caused a lot of small businesses to pay taxes on their income, and the business owner to pay again, because the profit passes through to his or her personal tax return. It was this structure that Snyder eliminated.
outdoor6709
Sat, Apr 30, 2011 : 11:55 a.m.
Mr Irwin is correct about one thing. Page 2 was an interesting read. If you wonder why small business does not grow in Mi you need to read page 2. Under current tax structure, Sub S corps and LLC's are pay MBT taxes, then pay personal income tax on same money. So if you are a small business you pay MBT, the MBT surcharge and 4.35 % personal income tax. After the government gets it "fair" share, there is no money left to expand and hire new workers or pay wages or benifits.
Cendra Lynn
Sat, Apr 30, 2011 : 4:34 a.m.
Let me see if I have this straight: if we dislike taking from the poor and giving to the rich we are negative, complaining, and on the wrong side? Wrong side of what? Autocracy? And ancient history includes our founding fathers, right? I guess the price of freedom is not only eternal vigilance, it also must include having to educate those among us who haven't studied the issues. Sigh! Well, fortunately some of us have had 50 years experience in doing exactly this and have moved this country and others a few slow and very painful steps forward. Power to the people.
outdoor6709
Sat, Apr 30, 2011 : 2:21 a.m.
What Mr Irwin and other politicains refuse to tell you is Corporations and business DO NOT PAY taxes. They pass the taxes on as part of the cost of the product or service you buy. The reason politicians LOVE business taxes, is the tax is hidden and the unsuspecting customer does not know how much the hidden tax costs. With no hidden taxes, taxpayers will have a better idea how much money politicians are taking from them and spending on projects that only befifit politicians reelection attempt. Thank the state voters for term limits. Go Blue, Go Rick.
Boo Radley
Fri, Apr 29, 2011 : 10:39 p.m.
The only real problem, as others have pointed out, it that tax cuts for businesses do not work. They have been tried for years and the businesses are happy to take the cuts, but do not hire more workers as a result. Even when they use the savings to update and modernize their facilities, there still is no increase in employment. When the government starts offering the money as a subsidy for new workers insteas of tax breaks, them perhaps we will see some progress. No workers ... no money.
grye
Fri, Apr 29, 2011 : 7:08 p.m.
Whine, Whine, Whine. Complain, Complain, Complain. Have you ever wondered how a meal tastes just by looking at it? Sometimes good, sometimes bad. We haven't tried this meal yet. Let it savor a bit. We will find out if it is good or bad. You all are making this out to be brussel sprouts (unless you already like brussel sprouts) when it is something entirely different. Quit pre-judging the meal. The last meal we had didn't work out so great.
Oldman
Fri, Apr 29, 2011 : 6:53 p.m.
Jeff, you say that in order to attract businesses we need an educated workforce, but yet isn't one of the arguments that our educated workforce is leaving the state to find jobs elsewhere? So do we need good jobs to attract the young educated workforce? Which came first the chicken or the egg? Why spend all this money to educate a workforce that is going to leave because there are no jobs?
leaguebus
Fri, Apr 29, 2011 : 6:27 p.m.
You know what is funny about this whole mess, our Michigan Business Climate. The Granholm business climate was 17th best in the nation. Read the job indicators and realize that this Snyder tax shift will just allow our corporations to invest heavier overseas and hire more overseas than here.
Jeff Irwin
Fri, Apr 29, 2011 : 6:25 p.m.
Gyre, Check out the chart on page two of the HFA analysis. Revenue from corporations will go from about $2.2B this year to just around $300M during the first year this is fully implemented (FY 2012-13). A good example of why is that a corporation like Chrysler is organized as an LLC. As such, they won't be paying the 6% or the 7%, but rather the 4.35%. Also, the continuation of the credits already granted is part of the cause of this. On the question of making Michigan a good place to run a business, I think that for most of the economic growth we're trying to attract, a talented, well-educated workforce and a high quality of life have been shown to be the best drivers of business attraction and retention. That's why most of MEDC's big successes are attached to our research universities.
ssAA
Fri, Apr 29, 2011 : 6:35 p.m.
Jeff - an LLC is not a corporation unless it elects to be treated as such for tax purposes. If Chrysler is truly a taxable c corporation it will be subject to the 6% tax. It seems that you are either purposely disseminating incorrect information or that you do not even know what you are voting against.
grye
Fri, Apr 29, 2011 : 5:42 p.m.
"This is an albatross," Irwin said. "When I came to Lansing, I wanted to contribute and make Michigan a better place to be, to raise a family and to run a business, and what happened today is completely contrary to that. Wait, didn't Snyder make changes to help businesses? Isn't that just what Irwin said he wanted? Can't have it all ways Jeff.
Jeff Irwin
Fri, Apr 29, 2011 : 5:40 p.m.
Thank you for all of the comments. For those of you interested in reading the analysis of the non-partisan House Fiscal Agency, here is the URL: <a href="http://www.legislature.mi.gov/documents/2011-2012/billanalysis/House/pdf/2011-HLA-4361-3.pdf" rel='nofollow'>http://www.legislature.mi.gov/documents/2011-2012/billanalysis/House/pdf/2011-HLA-4361-3.pdf</a>. If you only look at one thing, the chart on page two is a good summary. One additional comment I would add to this debate is that I hear broad agreement in the State House for fixing the MBT surcharge; and, I think a reform of business taxes in Michigan that substantially reduced taxes on businesses might have emerged with quite a bit of bi-partisan support. However, the Republicans passed a bill that went way too far by reducing corporate tax liability by 82% and eliminating a number of credits that were working well. In order to pay the bill for this $1.7B tax cut, HB 4361 nearly eliminates the tax liability for corporations in Michigan and in the process drastically increases the tax liability for seniors, low-income workers and those investing in urban renewal. That doesn't sound like a plan to make our people more prosperous. Eliminating credits for giving to homeless shelters and food banks!? I think this piece of public policy could have benefited from a little bit more deliberation so that we could individually consider some of the programs that are working well. Hopefully, the Senate will see less political advantage to rushing to judgment.
InsideTheHall
Fri, Apr 29, 2011 : 7:35 p.m.
Rep. Irwin with all due respect, what exactly are you doing to create private sectors jobs and foster capital formation? We don't need programs we need jobs to eliminate the need for those programs sir.
ssAA
Fri, Apr 29, 2011 : 6:08 p.m.
Jeff, Currently, a C corporation is subject to a tax of about 7% based on the two components of the MBT and the surcharge. Under the proposed legislation, the corporate income tax would be 6%. How does that reduce corporate tax liability by 82%?
say it plain
Fri, Apr 29, 2011 : 5:59 p.m.
"That doesn't sound like a plan to make our people more prosperous". But that's what they're billing it as, so I hope that the Senate will also see some political advantage to *requiring proof/accounting* so that we can see how the governor's plan is working! The GOP should *want* that as a demonstration project for their ideas about how to stimulate economies from the top down, and we all deserve transparency about how the plan is instantiated and evaluated, I think.
alternativeview99
Fri, Apr 29, 2011 : 4:24 p.m.
Could someone explain to me how taxing seniors and middle-class workers to remove even more of their purchasing power helps small business? Who will be able to purchase the goods and services of these small businesses? If you want the economony to recover as we knew it, with a solid middle-class, you have to put purchasing power back into the hands of the middle class citizen. Taxing the middle class to support tax cuts to businesses is not the way. You say that these cuts will benefit the "ma and pa" small business on the corner. Well, I think what ma and pa needs right now are customers with money to spend. So, this tax cut is probably not meant for them. They are just an after thought used to justify it. So, let's ask. Who does this tax cut really benefit?
Townie
Fri, Apr 29, 2011 : 5:37 p.m.
Ha, you need to ask that question? This tax cut (like all the previous ones...) benefits the rich and corporations which are the core constituencies of the Republican Party here and across the country. That's it in a nutshell. And all the nuts are the ones who aren't rich but believe the lies sold to them by the Republicans and vote for corporations and the rich to get more and more. Wonder how long it will take them to realize they are stuck in a world where they are only going to be working harder and harder for less and less under a government of the rich, for the rich...? The rich and corporations have to have seized full control of the country before the ignorant realize they've been had. The rich and corporations are almost there now (thanks to things like the Citizens United Supreme Court decision). Now all that is lacking is a Republican president to finish off the coup.
Grace York
Fri, Apr 29, 2011 : 4:08 p.m.
According to the American Community Survey, 2/3 of Michigan households with the householder 65+ earn have incomes less than $45,000 and 92% under $100,000. These people have probably survived the poverty of youth, paid 20% down when buying a house, and paid state taxes for at least 40 years. Because they are no longer working, they often provide day care for their grandchildren. When you're young, it is easy to declare you will work until you're 67. However, you begin tiring around 57, and by 60 your employer is trying to edge you toward early retirement so it can hire less expensive workers. Those born after 1952 will be paying full retirement taxes on everything until they're 67.
John
Fri, Apr 29, 2011 : 3:33 p.m.
Steal from the poor and give to the rich. Mr. Snyder will be a one-term blunder.
Christopher LeClair
Fri, Apr 29, 2011 : 3 p.m.
"Sorry, but cutting taxes doesn't create jobs. We have been cutting taxes in this country since the 1980s and our economy has never been this bad. Taxes are at their lowest point in history and corporate profits have never been higher. But where are the jobs you people keep promising?" -Garrett
Mike K
Sun, May 1, 2011 : 9:12 p.m.
Alan - that was a long time ago. Garrett - there have been some pretty good times since the 80's............ Gyre - spot on. I got a nice bonus check from the bad corporation I work for this year, only to fork over 1/3rd of it to our federal taxes. I had that money scheduled for upgrades to the house. Now I have a pissed off wife. Plain - I am trying to build something to pass on to my kids. Do you really think government should have a piece of it? Seriously? Keynesian certainly think so. Savings is bad, and those who save are punished. We punished enough making 0.2% interest on our savings.
alan
Fri, Apr 29, 2011 : 10:48 p.m.
Grye, The top rate was 70% when I was a kid and unemployment was almost non-existent and the government was solvent. The rates have steadily dropped since 1980 and executive salaries have skyrocketed and the government is broke while nothing trickles down.
grye
Fri, Apr 29, 2011 : 7:02 p.m.
We should then increase our taxes to 50%. Just think of the job growth when we don't have any extra money to purchase products. But we will have compost trucks made of gold.
say it plain
Fri, Apr 29, 2011 : 3:51 p.m.
But the people who stand by its utility as "common sense" are very effective with that rhetoric, so it must be actively countered as an idea if people are to stop believing it. It's like the 'death tax' scene, which I think I just read we don't have one of in this state either. You know, an estate tax. A tax imposed on people when they die. *Some* tax imposed on some level of estate money, much of which has *never* been taxed. It gets painted in emotional terms, images of the big bad government coming to grammy's funeral and stealing away her grandchildren's inheritance get propagated and a very reasonable source of tax money is lost. Why not bring back an estate tax in MI to help off-set some of these corporate tax breaks? Has that been considered?
alan
Fri, Apr 29, 2011 : 3:08 p.m.
It's a myth not born out by statistics. I have heard the same claim for 30 years and it hasn't happened yet.
alan
Fri, Apr 29, 2011 : 2:50 p.m.
Oh, I forgot pensions. If we agree, as a society, to tax individual income then it does seem fundamentally unfair to exempt certain types of income, above standard deductions, from taxation. We are talking about taxing pension income that has never been taxed before but the problem is that by taxing a fixed income in retirement with a fixed tax rate the net effect, given that inflation is positive, is that the effective tax rate increases annually on those with a fixed income. So why not just tax the present value at the time the wages are paid? If it's a 401k we know the numbers. If it's a defined benefit plan it's an easy calculation, in fact one that the employer already does (or should be doing). The state gets the money now at the expense of a worker who has the potential for increased earnings in the future, and those in retirement don't have to worry about their net income decreasing anymore than it already does due to inflation.
Townie
Fri, Apr 29, 2011 : 2:43 p.m.
Once again we are going do spend billions of tax money based on what is essentially a myth with virtually no real evidence that tax cutting produces jobs. If someone out there has a study (peer reviewed thank you) that shows clearly that corporate taxes always produce jobs and make a 'profit' against the loss of tax revenues I'd love to see it. I've asked Snyder, the Republican legislators in charge (even to name a state where this worked) and have yet to receive anything; just that 'common sense' says so. Ha; can you imagine going to your boss and saying you'd like to spend $1.8 billion of the company's money and then substantiate the expected profit by saying 'oh, it's common sense'. So much for our CEO Snyder. I wrote Rick Olson about why he couldn't introduce some legislative amendment that would require an audit or independent study of the results of this 'experiment' and he responded that the job creation in this bill was 'uncountable' and too complicated for any sort of accounting. I told him that was just an excuse to avoid accountability. The economy is recovering and by not making any attempt to actually measure if $1.8 billion given to businesses produces jobs then the Republicans and other myth believers will be able to proclaim it was the corporate tax cut that produced the jobs with NO real evidence or true accounting. Just like SPARK's job creation numbers - unaudited, unsubstantiated and unaccountable...
DonBee
Sun, May 1, 2011 : 12:16 a.m.
Townie - No worse then the way jobs were counted for President Obama for the stimulus bill. Both parties lie, and we are dumb enough to listen to them and vote for them over and over again. Good Luck Michigan
say it plain
Fri, Apr 29, 2011 : 2:55 p.m.
Let's get Irwin to push for it maybe? Couldn't the Dems at least ask for such an accountability clause, and then require the GOP to deny it? "Common sense" is not a buzzword the Dems should allow the GOP to own like that lol. With their teapartying ways, they've grown used to this as code for so many things, and it works with the gullible and anti-intellectual crowd so well. MI's Dems should NOT let the 'one smart nerd' guy get away with it, at least!
xmo
Fri, Apr 29, 2011 : 2:21 p.m.
"state's tax burden from corporations to individuals." Only if you believe in Santa, The Easter Bunny and see Elvis do you believe that companies pay taxes. They pass the taxes on to individuals. So, we are eliminating the middleman!
a2citizen
Fri, Apr 29, 2011 : 3:29 p.m.
Yes Virginia, There is a Santa Clause
alan
Fri, Apr 29, 2011 : 2:26 p.m.
Are you suggesting that businesses who receive a tax break will then lower prices or increase employee wages?
BornNRaised
Fri, Apr 29, 2011 : 2:09 p.m.
The problem is that no one trusts politicians. Why is that? One of the main reasons is that there's never any follow up on their plans. Synder says this will open the door to job creation. That would be great! But business owners have stated in the media that they don't see it that way. They have taken the position of stock piling any extra income in case of another recession. Who can blame them? It's like then Ann Arbor called for single stream recycling. Where's the follow up to what it's ACTUALLY costing vs. saving? What we need is transparency. You say you have a plan to fix things? GREAT! Implement it, follow up on it, and make adjustments. People have become so complacent with politicians telling us "this is going to be better" and then turning our backs on it. If I sold you a system to save energy in your home, and you never saw your bills go down, would you expect me to fix it? I'm not saying these programs haven't worked. I'm saying no one knows. And that's a huge problem.
Mike K
Sun, May 1, 2011 : 9:05 p.m.
Good question on single stream recycling. I will say this though; this household is definitely recycling more.
Sebastian Wreford
Fri, Apr 29, 2011 : 2:08 p.m.
As a taxpayer, I'm not interested in paying taxes except to support the social programs that Snyder's pillaging. Snyder's kleptocratic "Budget" and pro-corporate stance will result in gains only for the individuals and institutions that have bankrupted this country over the past 30 years. I'm appalled by Snyder. Honestly, does it even seem like he has the slightest interest in the well-being of the people in the State he governs? How can you reconcile that with the preposterously large cuts to the Education budget? Pensions, Education, and the Poor. He's patently raiding the scant funds of those people patently least able to defend themselves. Seems like an easy target, doesn't it? Objectively speaking, you can certainly see that he personally profits directly from his mechanical endorsement of right-wing, corporate, labor-crushing legislation. And you can certainly note that his kids don't have to worry about the engineered collapse of the public school system.
Mike K
Sun, May 1, 2011 : 9:04 p.m.
As a taxpayer, I'd like to pay less so that I have more money to spend on my house and stimulate the local economy.
Oldman
Fri, Apr 29, 2011 : 2:02 p.m.
Dave - Go ahead change your tax home to FL, but don't count on that $1,200 homestead property tax credit you were used to getting from our State, or the 100% homestead property tax you were claiming for your home also. My guess is those two breaks you were receiving are far greater that the 4.35% tax you would pay on your retirement....
MWH
Fri, Apr 29, 2011 : 1:44 p.m.
I hope this tax plan doesn't create a problem that only Robin Hood can fix...
alan
Fri, Apr 29, 2011 : 1:38 p.m.
AA.com used to be a place for reasoned discussion but it seems to have degenerated into another Yahoo with all of the partisan sniping and insults. Yes, the SBT was a double taxation. You file a schedule C and pay your personal taxes and then file the SBT and pay additional tax. However, the income minimums are such that the overwhelming majority of small business owners never paid anything extra so the assertion that this will promote small business development is incorrect. Also, as a former small business owner who was never once required to pay the SBT, any tax break would not have encouraged me to hire anyone that I didn't need. Can anyone provide one concrete example of where cutting taxes on businesses actually creates jobs? It sounds good but we've been hearing it for 30 years and I haven't seen it yet. It seems that the extra money goes to overpaid executives and does nothing for the average employee. CEO salaries have increased by 500% since 1980 while average employee salaries have increased by 2% (inflation adjusted). If average salaries had increased at the rate of executive salaries then the average American wage would be $175,000 today. The key to attracting business is an educated workforce yet we cut education spending. How is that sensible?
Mike K
Sun, May 1, 2011 : 9:01 p.m.
A case study exists in Arizona where within three months, Intel announced a new factory and First Solar announced another new factory. How did that happen? How did Arizona get two huge factories? The short answer is that they "foster" a business friendly climate. It really is that simple. Competition is good guys. It brings out the best in us.
David Briegel
Fri, Apr 29, 2011 : 5:23 p.m.
Which is why they need to devalue educators and destroy education.
alan
Fri, Apr 29, 2011 : 1:56 p.m.
Correction- The key to attracting the kind of business that pays a living wage and provides some job security is an educated workforce.
Stephen Landes
Fri, Apr 29, 2011 : 1:34 p.m.
If our state problems weren't so dire the comments by Democrats would be hilarious. They had eight years to try to set the state government straight, but it on;y got worse. Now they bray (that's what donkeys do) that all these changes are unfair and we can't solve the problems the way the Governor is going about it -- yet they offer not one single COMPREHENSIVE plan to do anything. Apparently this is a case of 'those that can do, those that can't complain'.
David Briegel
Fri, Apr 29, 2011 : 5:22 p.m.
Stephen has trouble accepting responsibility for his Just Say No, TeaPublicans! Jenny never had a chance. Neither did Obama.
Townie
Fri, Apr 29, 2011 : 3:09 p.m.
Who controlled the legislature for the last 8 years? The Republicans who blocked anything real the governor tried to do! It's like the Republicans now blaming the Democrats for the huge economic mess Bush and his Republican Congress did! Amazing logic.
dlb
Fri, Apr 29, 2011 : 2:02 p.m.
Granholm tried too hard to be centrist and she was unable to accomplish much with the republicans in the senate anyway. Trying to negotiate with the no-taxes crowd is like trying to negotiate with a rock.
discgolfgeek
Fri, Apr 29, 2011 : 1:20 p.m.
I have no idea whether this new budget will increase business investment in this state and neither does anyone else no matter what they say. Economists work in the world of theory based on backward data portending forward into a world that has changed since that data was collected. I do know that if we don't have a well-educated workforce, corporations with good jobs are not going to want to come here. Time will tell as it always does.
DonBee
Sun, May 1, 2011 : 12:13 a.m.
And without good jobs, the educated young adults will leave the state to seek employment elsewhere. Right now we have a net out migration of highly educated people. Short term we need more good jobs. Good Luck Michigan
alternativeview99
Fri, Apr 29, 2011 : 5:02 p.m.
discgolfgeek... I guess I missed this. Where is any of this tax plan supported by economics? I thought it was politics and the use of economic sounding statements to support what some people want to do for their own gain. It doesn't take a rocket scientist to understand that if your economy thrived when the middle-class had money to consume products and services creating demand, you can't have it thriving if you keep taxing the middle class more and more and taking away their purchasing power. The income gap is way out of balance. Whereas the super rich, the top 10% wealthiest in our society, used to take only 30% of the income, they now take 90%. That means the middle-class and the rest of our society have to figure out how to stretch the left-over 10%. As I said, it doesn't take a rocket scientist to figure out that this means spending by the middle class will dry up.....and with it the work and contribution they used to make to this society to increase GNP. So, as the super rich take more and more of the pie, the pie as a whole starts to become smaller. What the super rich just don't understand is that at some point, people check out of the contract. People don't figure minimum wage lives serving a landlord with no future is worth it. They no longer are committed and ....guess what.....their productivity goes DOWN. In other words, like it or not, the idea of a super rich class of people directing a lower class in a benevolent way that accommodates the fact that the dominated class is less intelligent and needs to look up to the super rich for direction, just isn't all that stable. At least that is the way I see it. There are obviously other ways to view it. But, as you say, history will tell. I just wish I didn't have to waste my time waiting it out.
dlb
Fri, Apr 29, 2011 : 1:08 p.m.
I don't see why Snyder stops at the corporate give-away and stick it to the low-income approach. He should just use his Emergency Manager Act to force all private and public employees to accept minimum wage and give up all benefits - then we would be a truly business friendly state! Oh, and lets get rid of all politicians. Dictatorships are so much more efficient.
Moscow On The Huron
Fri, Apr 29, 2011 : 2:14 p.m.
HRH Obama agrees with you
pseudo
Fri, Apr 29, 2011 : 1:04 p.m.
Mr. Snyder has based his budget on myth and myth alone. It flies in the face of historical economic data. Balancing your budget on the poor and retired after giving away so much to your friends in the business community is the equivalent tying this state's economic outcome to a boat anchor in deep water. Think about it - who do you want to depend on for a recovery - the poor and retired? Really? Businesses with a track record of breaking our roads, ruining our air, ruining neighborhoods and sucking city service resources without reimbursing those cities do not deserve a free ride. Running their businesses so poorly that they went bankrupt or bankrupted others does not justify a free ride either. Michigan business tax rates are competitive with other states. So far, Mr. Snyder, I am unimpressed.
DonBee
Sun, May 1, 2011 : 12:11 a.m.
so lorie - We should close all businesses in the State of Michigan because they are evil, and we can all become public sector employees. Great vision. Good Luck Michigan
Dave
Fri, Apr 29, 2011 : 1:02 p.m.
After I vote in the recall, I will change my address to my winter address, which is in Florida. I will still go back and forth because I have family here in Michigan, but for tax reason's I will claim Florida instead of Michigan as my home of record. I'll bet that I won't be the only one doing it. By the way did I mention there is no personal income tax in Florida.
a2citizen
Fri, Apr 29, 2011 : 3:27 p.m.
Why are you waiting?
MB111
Fri, Apr 29, 2011 : 2:46 p.m.
very honorable
DaLast word
Fri, Apr 29, 2011 : 12:55 p.m.
Michigan is only one of two states in the country that has this single business tax, which taxes the business itself whether it's making a profit or not. How could anyone expect to attrack a start up under those conditions? "By the way mr. /ms business startup, come to MI and start paying taxes right away for the pleasure of doing biz in our great state.
Top Cat
Fri, Apr 29, 2011 : 12:44 p.m.
Mr. Irwin never addresses the issue of what happens to our young people AFTER they have completed their education in Michigan. The answer is they leave the state so they can find work. Mr. Irwin would be better asking the question of why so many young people in America are moving to Texas. The answer is they have a tax code and business environment that encourages growth and jobs. As long as we ignore Mr. Irwin, we can have that as well.
Mike K
Sun, May 1, 2011 : 8:57 p.m.
In our union, everyone is free to live where they want. That is why one must consider the "investment" in education. Michigan was once a destination for job seekers. Somehow that ended. Wonder how that happened? Snyder is trying to re-create this. Kudos to him. If Snyder is succussfully (I hope all wish that?), educated people will be drawn to Michigan.
leaguebus
Fri, Apr 29, 2011 : 5:35 p.m.
Texas, a state where only 67% of the high school students graduate. Wonderful role model for the wealthy, who can send their kids to private schools, poor role model for middle class families that need public schooling.
Townie
Fri, Apr 29, 2011 : 3:05 p.m.
Texas you say!? Texas, that shining light of low taxes, anti-union, 'lean spending' stuff? The one with one of the biggest state deficits in the country? $25 billion in a $95 billion budget? Now how could a deficit occur in a place where everything our MI legislature wants to replicate be? Because it's all myths and lies. Worst educational system in the country (and getting worse with their deficit) and highest number (and percent) of uninsured adults and children in the country? The one whose Governor wants to leave the US? What a great place to live!
David Briegel
Fri, Apr 29, 2011 : 2:01 p.m.
And they have all the slave labor the upper class desires!
say it plain
Fri, Apr 29, 2011 : 12:37 p.m.
Yes, good idea @Veracity! Maybe the opponents of this change--which will undoubtedly pass, no, doesn't Snyder have enough GOP bodies behind him or are they all afraid of the voting seniors--should push NOW for an agreed-upon way to track the effect of Snyder's plan to get businesses to create new jobs with the windfall they get in this plan. Nobody should be afraid to *really see* if this works at doing what it's allegedly set up to accomplish.
Roger Roth
Fri, Apr 29, 2011 : 12:32 p.m.
@veracity Well said. It's one thing to create a million jobs, the payroll out of which the State receives a guaranteed % (like a franchiser with an override) but, quite another that the million jobs give each of the workers enough to sustain a meager life-style. Change Jobs, Jobs, Jobs, to Living Wage, Living Wage, Living Wage. Then we're onto something. Trouble with the Legislature Job mantra: a win for the state, a loss for the worker and for MI.
JSA
Fri, Apr 29, 2011 : 12:47 p.m.
And pay for it how? Oh that's right, steal from someone else.
Grant
Fri, Apr 29, 2011 : 12:44 p.m.
Will this tax savings for corporations ever trickle down to employees, or will it come in the form of stock dividends. And you know that most corporate big wigs own much stock in their own company. What else would motivate them to keep the savings in their own clutches?
fjord
Fri, Apr 29, 2011 : 12:29 p.m.
I can think of one Republican who would be outraged by the Governerd's plan: Abraham Lincoln. Hey Rick, Honest Abe talked about "government of the people, by the people, for the people," not "government of the corporations, by the corporations, for the corporations." Snyder is kicking us while we're down, and his corporate cronies get all the benefits. How many times do we have to prove that trickle-down economics is an utter failure before these idiots stop trying to implement it?
Mike K
Sun, May 1, 2011 : 8:52 p.m.
You liberals miss the point. Commerce creates a solid tax base. Every new business hires employees (income tax), and those employees consume locally (sales tax). The new business hires services (cleaning, uniforms, landscaping....) furthering the effect. Society has evolved from commerce. Markets for goods and services have always been the center point of society. All of these platitudes - "corporate cronies", "tax the rich", "anti education" are plain silliness. Corporations employ us and give us benefits - that is, if you are good enough get yourself hired. Both Intel and First Solar are building new plants in AZ. They've successfully attracted business to their state. I'm sure the cynical liberal will think it did so by graft and deception, but the bottom line is that AZ created jobs for their citizens, and the tax coffers will be rewarded for it; therefore, more civil services. See how that works?
Grant
Fri, Apr 29, 2011 : 12:41 p.m.
In Rick's mind at least one more, and one that only fill the coffers of the corporations.
snoopdog
Fri, Apr 29, 2011 : 12:28 p.m.
We could have stayed the course with Virg Bernero and continued our trip down the rat hole, but fortunately the majority of folks living outside looney land Ann Arbor saw that this was not a good option. Stay the course Rick, we have your back side ! Good Day
DonBee
Sun, May 1, 2011 : 12:08 a.m.
cette - I will not cast anything on Mr Bernero, but can you tell me what has happened with the city government in Lansing since the election and the number of people employed by the city of Lansing? Interesting set of numbers and situations. Remember they are still operating on the budget passed under Governor Granholm, so nothing that Governor Snyder has done has had an impact yet in Lansing. Good Luck Michigan.
cette
Fri, Apr 29, 2011 : 5:43 p.m.
It's the expanded powers that are the problem.
MB111
Fri, Apr 29, 2011 : 12:56 p.m.
cette, did the detroit public schools warrant an EFM? I would say yes, and Mr. Bobb has done a tremendous job with no support or resources.
cette
Fri, Apr 29, 2011 : 12:41 p.m.
Casting aspersion on Virg Bernero! But of course. Why did the Republican nominate Rick Snyder, the man who ran a feel good campaign of no disclosure? Did Rick Snyder mention the tax increase on poor people or pensioners? He did not. Did Rick Snyder mention the hundreds of dollars cut for school district? Nope, not that either. How about those expanded EFM powers? No, not that one either. So, people voted for a guy who generated illusions, illusions that his values were their values, but hasn't delivered in proposals, much less facts, what he intimated. We are going a different rat hole instead, if you will. It's a rat hole that's very good for small business, and is not positive for virtually every other constituency. And our society is not made up of just small business. It is unproven that lowering taxes generates more jobs. In fact,the state coffers are filling up currently with that tax in place.
Veracity
Fri, Apr 29, 2011 : 12:17 p.m.
If Rick Snyder were so certain that his business tax cuts will generate new business and new jobs for Michigan then he should report in a year the actual number of new businesses registered and the associated increase in jobs in Michigan. I have not observed any predictions for either new business growth or for new employment as a result of changes in our tax law.
DonBee
Sun, May 1, 2011 : 4:49 a.m.
alternativeview99 - You mean like the $100,000,000 in tax money that was given to movie companies under the film tax credit program? Or the millions given to battery companies? Or do you mean the millions given to out state wind farm owners or...? These all happened during the last Governor's term in office. Now the Governor is trying to make everyone pay the same amount on profit, and then the state can decide to write a check to those business/groups/individuals that need money from the state, rather than hiding it in the tax code. The US Government hides just shy of $1,000,000,000,000 in social engineering in the IRS tax code. From mortgage deductions to dependent deductions, to oil depletion allowances to business travel write offs. Michigan's tax code was doing similar things. Is that the right way to do things? Good Luck Michigan.
alternativeview99
Fri, Apr 29, 2011 : 4:12 p.m.
Check out Snyder's history at Spark in Ann Arbor. It looks like a lot of R&D firms to me. Not many jobs. But, hey....please feel free to offer facts to show how he has a history of establishing JOBS as most middle-class americans understand that term to mean. Oh....and where is the web site that reports how representatives vote? I think it is very important we make people run on their record of how they voted as our representatives. I do not fault the Snyder supporters. It is their right. I do not, however, support misinformation or statements to the public that are misleading. If the people of Michigan want to support business at the expense of seniors and working people, it is absolutely their right. But, let's be truthful about the facts....or lack of facts. No one from the Snyder camp seems to be able to explain how taxing seniors and teachers and public employees more and more will give them the purchasing power to buy goods that will in turn support business here in the state. Who will be left to buy anything if they are not making a good wage? I only see subsidies to companies to make money for the owners who may or may not be Michigan residients and who could care less about the average citizen.
Stephen Landes
Fri, Apr 29, 2011 : 1:39 p.m.
Of course "Veracity" doesn't know about the dashboard -- too busy defending worn out old Democrat policies to bother to read or listen.
andys
Fri, Apr 29, 2011 : 12:56 p.m.
No problems there. Since Obama established the "saved or created jobs" metric, Rick can just make up numbers that suit him right out of thin air.
MB111
Fri, Apr 29, 2011 : 12:55 p.m.
Do you realize that there is now a dashboard to hold the state government accountable? Should we keep the ultra succesful status quo - including no measurement/accountability?
Awakened
Fri, Apr 29, 2011 : 12:26 p.m.
The law hasn't changed yet, Veracity. The above article is instructive.
Mr. Ed
Fri, Apr 29, 2011 : 12:10 p.m.
The businesses may come to Michigan but now your going to see many pension dollars leave this state. No one left to purchase the products produced by the new business. All the new jobs will be 7 to 10 dollar rage. Good luck Michigan.
Awakened
Fri, Apr 29, 2011 : 12:33 p.m.
New pensioners will likely plan on being full time residents of Florida instead of snowbirds but there is little reason for current pensioners to leave unless they get $100,000 or more in pension, or are younger than 60. But, Snoop, pensioners do support local small business. My local diner is all greyhairs before 11am.
snoopdog
Fri, Apr 29, 2011 : 12:18 p.m.
Wilbur says , it won't matter because pension dollars are not paying Michigan taxes. Good Day
say it plain
Fri, Apr 29, 2011 : 12:08 p.m.
woohoo, lets watch the job creation begin, because to inflict this much pain without doubt that it's "the right thing to do", Snyder must know for sure that it will 'work', right?! RIght?!
say it plain
Fri, Apr 29, 2011 : 2:27 p.m.
Woa, I didn't complain, I merely pointed out that this is pain being inflicted on lower-income people, and the governor seems certain that it is going to help us all grow MI's economy. I said nothing about supporting the status quo, what makes you think I'm 'for' that? I think it's unfair, actually, that MI is one of the few states which doesn't tax any retirement income, and would like to see that taxed for folks over a certain income level, certainly. I am far less supportive of taking away the EIC as he's proposing, and far far less certain that merely reducing taxes on corporations will create significant new employment, but I am hoping to see the jobs created, why wouldn't I?
MB111
Fri, Apr 29, 2011 : 12:53 p.m.
So the status quo is a raging success? You complain but provide no opinion other than 'change is wrong'
Moscow On The Huron
Fri, Apr 29, 2011 : 12:27 p.m.
Yeah, you're right, it would be better to stick with the previous plan of killing the state by blowing jobs away from Michigan.
Adam Jaskiewicz
Fri, Apr 29, 2011 : 12:08 p.m.
Can we get an article explaining the current and proposed business tax code? I've read up on what the new law does and what the MBT does, and I'm not totally clear on how the MBT works but it seems to me like if anything, this takes the tax burden off of sole proprietorships, and raises the taxes on larger businesses. If this means that Visteon and GM are paying a little more in taxes to take the burden off Joe's Auto Repair and the diner down the street, it sounds like a fairly progressive tax...
DonBee
Sun, May 1, 2011 : 12:03 a.m.
alan - Unfortunately you are misinformed. The MBT levied taxes on total revenue, not just profits, so if Joe LOST money running his Auto Repair business, he still owed taxes. Good Luck Michigan
alan
Fri, Apr 29, 2011 : 10:42 p.m.
Joe's Auto Repair and the diner down the street have never had any obligation to pay any additional business tax because they didn't earn enough. I think they are hoping that you don't understand how it works so you believe that it will benefit the small businesses that most need help.
andys
Fri, Apr 29, 2011 : 12:52 p.m.
"...and I'm not totally clear on how the MBT works" Join the crowd.
stunhsif
Fri, Apr 29, 2011 : 11:57 a.m.
""This is an albatross," Irwin said" And you Mr. Irwin are a "dinosaur".You thinking is from the past, ancient history and toxic. We are tired of being "blown away" , now please stay in Ann Arbor and play with the college kids.
cette
Fri, Apr 29, 2011 : 12:09 p.m.
Um, since we're doing animal metaphors , and that's fun, let's remember dinosaurs weren't toxic, but they were ancient. Irwin is not toxic, he has a different opinion. Don't follow blindly, Mr. Stunhsif, you'll end up walking right off a cliff that way.
Wolf's Bane
Fri, Apr 29, 2011 : 11:52 a.m.
Woah! State Rep. Jeff Irwin, D-Ann Arbor is (finally) worried about the GOP plans to take away hundreds of millions of dollars in education funding? Really? Hey, what universe do you live in, Jeff!? This is a delayed reaction if I have ever seen one! You might want to start speaking up here for our kids and teachers, slick?
Moscow On The Huron
Fri, Apr 29, 2011 : 11:46 a.m.
Somebody is finally doing what needs to be done to fix the state, and all we hear from the negative people of Ann Arbor is complaining. We are finally going to get out from under the bad habits and it will be painful, but necessary. The fact that there is so much complaining coming from AnnArborites, who are often on the wrong side of so many issues, is only confirmation that the right decisions are being made. Keep it up, Rick. There are a few of us here who get it and are behind you. We now return you to the copy-pasted, predictable, DNC-emailed platitudes.
alan
Fri, Apr 29, 2011 : 3:50 p.m.
Moscow-Your response to Garrett is not logically consistent. Deflecting blame does not answer his question. We have heard the same argument for 30 years with no results. Taxes are at an all time low, income disparity, wealth disparity, and unemployment are at an all time high (in my lifetime). How is more of the same going to produce a different result?
Garrett
Fri, Apr 29, 2011 : 3:33 p.m.
Deflecting the question is easy. But if you believe in cutting taxes to create jobs and in the 'trickle-down' theory, the question remains: Now that taxes are at their lowest point in recent history, and the distribution of wealth is at its most unequal since the great depression, where are the jobs promised by your theories? When you have an economic system that redistributes the wealth of the country to the top one percent, so much so that they own more than hundreds of millions of Americans combined, can you really blame people for asking the question about whether tax breaks and trickle-down economics isn't just a ruse put on by elites, both conservative and liberal, to redistribute the wealth in their favor? Because unless you have your head in the sand all the numbers point to this as what is happening. While the elites, politicians, corporations, executives, etc, are putting the country's money in their private bank accounts and investment firms, they do so by promising us jobs and/or demonizing anyone who dares to ask why they own so much of the country. The question: Where are the jobs?
Billy Buchanan
Fri, Apr 29, 2011 : 3:06 p.m.
I to re-affirm your commints. I sent in essence a comment simlar to yours in the last few days.
Moscow On The Huron
Fri, Apr 29, 2011 : 3:01 p.m.
Where are the jobs Granholm promised? Where are the jobs (i.e, 8% unemployment) Obama promised?
Garrett
Fri, Apr 29, 2011 : 1:20 p.m.
Sorry, but cutting taxes doesn't create jobs. We have been cutting taxes in this country since the 1980s and our economy has never been this bad. Taxes are at their lowest point in history and corporate profits have never been higher. But where are the jobs you people keep promising?
Wolf's Bane
Fri, Apr 29, 2011 : 11:57 a.m.
According to your logic, MOTH fixing the state entails cutting education? Isn't that a bit like shooting ourselves in the foot? Can we, as a state, really afford future generations to be less educated than our international competitors? Why not raise taxes on the top 25% wage earners in our state? Huh? Or are you one of these top 35 % simply trying to avoid paying your fair share of the tax burden that we all pay?
cette
Fri, Apr 29, 2011 : 11:52 a.m.
Look, Rick Snyder is a busy beaver these days, but doing what needs to be done to fix the state is not what I see happening. Don't equate wielding temporary powers with wise governance.
InsideTheHall
Fri, Apr 29, 2011 : 11:35 a.m.
Thank you Governor Snyder for carrying out your campaign promises and reinventing Michigan. Irwin and Rutledge are part of the "old Michigan" that created a bloated inefficient state at the governmental and business level constraining the talents of those who embrace the opportunity society. The problem with education is that the person in the front of the room is overpaid and underachieving in driving student outcomes. Who is John Galt?
sh1
Fri, Apr 29, 2011 : 11:45 a.m.
Overpaid and underachieving? Please elucidate with examples.
cette
Fri, Apr 29, 2011 : 11:37 a.m.
empty bromides...
Grant
Fri, Apr 29, 2011 : 11:29 a.m.
Snyder has given in on some items, but I have yet to see him do anything meaningful in the lowering the benefits for his business buddies. A little talked about fact... if the pension proposal are all capped at a $20,000 single and a $40,000 married, your earnings you TSA- 401K people will be cut in your deductions of over $40,000 single and $80,000 married on your state taxes.
cette
Fri, Apr 29, 2011 : 11:31 a.m.
Snyder is a one constituent politician. Small business.
Grant
Fri, Apr 29, 2011 : 11:21 a.m.
Not over yet.
braggslaw
Fri, Apr 29, 2011 : 11:17 a.m.
The legislation will pass both branches and the governor will sign ... nuff said...
cette
Fri, Apr 29, 2011 : 11:19 a.m.
Not really, there's lots more to be said...
cette
Fri, Apr 29, 2011 : 10:57 a.m.
What drives me crazy about Rick Snyder is the absoluteness of his ideas. He could have cut the business tax in half, and still be seen as pro-business. He could have left the EITC instead of cutting it, then bringing back a measly $25 dollar credit per kid. I don't know why he didn't work on school pension reform instead of the game theory shtick of dropping payments to school districts and letting the school boards individually negotiate with already stressed out staffs and systems. Like fuel costs, health care costs, and inflation pressures alone weren't market forces enough to make schools leaner. So supposedly, the legislators will help and legislate public employees to pay 20% or 13,000/year in bennies. Well, if the other costs keep rising, that's going to be a hollow victory, and not where the legislature should be expending their engergies. Quite the micromanaging crowd, this bunch of less government. Not. As for pension reform, I would think this crowd turns out to be a bunch of one timers in politics.The older generation votes regularly and often. This set of politicians will soon be has beens, but not soon enough....
DonBee
Sun, May 1, 2011 : 4:37 a.m.
cette - There is a reasonable probability of a $500 million surplus in the revenue this year. If the education establishment were willing to work with the Governor, and that surplus in revenue were to materialize, I believe he and the state legislature would be willing to direct most or all of it to Education. But right now it seems the powers to be would rather fight than work together. Both sides are WRONG in what they are doing, but no one is willing to take a step back from Dogma. Good Luck Michigan
cette
Sun, May 1, 2011 : 1:21 a.m.
Don Bee, I wondered where you were. I honestly thought with the Republicans in control of both chambers of the legislature, and the governorship, pension reform would be a reality. It's strangling school budgets, and it urgently needs to be redone. Inflationary pressures are increasing, what with the price of a barrel so high, and with the Fed putting so much money into the system. It was a bad choice Snyder made with his idea to defund the schools to make the leaner. In the Repub's quest to give the unions a hard time, and put all the blame on them, the Gov didn't factor in the overall economic situation. You would think a businessman would be aware of these macro trends.
DonBee
Sun, May 1, 2011 : midnight
cette & bill - I guess the changes from the original proposal were not "compromises": 1) Many retired folks will not pay anywhere as much in the way of taxes as they would have under the original proposal. 2) The 2006 change to tax law to give low income people earned income credit is only 3 tax years old (first year was 2007 - paid in 2008). Instead of nothing they get a little bit. 3) The individual income tax was held at 4.35 percent 4) Some money was left for films incentives instead of complete elimination 5) etc. But lets not let facts get in the way of a good rant to "enflame the base". If the Democrats had a reasonable proposal and put it forth, I suspect the Governor would have listened, but I don't know, and neither do you. Good Luck Michigan
Bill
Fri, Apr 29, 2011 : 11:49 a.m.
I agree with Cette. There was room for compromise that would have accomplished these goals without increasing the taxes on individuals with lower income. Synder's my way or the highway attitude will continue to work against him for any future elections along with those who have supported his efforts.
Awakened
Fri, Apr 29, 2011 : 11:46 a.m.
Wow.