A Tax Plan to Strangle Our State

A new bill in the Michigan House of Representatives, House Bill 4001 introduced by Rep. Lee Chatfield (R-Levering), would phase out the Michigan personal income tax.

lansing-capitol-domeA few things to understand. First, Michigan’s state revenues are projected to come in rather flat over the coming years. This means that there won’t be extra money to pay for things like fixing our roads (have you driven on them lately?), funding our schools, replacing Flint pipes and finally restoring clean water to families there, or anything else. In fact, our state has busy cutting funds to schools (by $411 per student in 2011) and cutting funds to local communities ($7.5 billion in recent years), so our schools and communities are already cash-starved. In fact, Michigan is the only state in the nation to have cut community funding in the past few years, and that means cities and counties have less funding for police, fire and other vital services.

Second, in 2011, the year Republicans gained a stranglehold on Michigan government, they got rid of the Michigan business tax and replaced it with the corporate income tax, which was in reality a massive billion-dollar tax break for corporations. Corporations in our state are getting away with not paying their fair share for our roads and schools, when they rely on them as much as the rest of us.

Third, the personal income tax would be a phase-out, not an immediate tax break for families. It would be reduced to 3.9 percent in 2018 and then by 0.1 percent each year, reaching 0 percent in 2057. So even if you’re all in for this plan, you’ll have to wait a good, long time to enjoy it once it’s fully phased in. And if you’re middle-aged or a senior, you likely will not even live long enough for that. And while you’re waiting for this tax break, year by year, our schools, our roads and our communities will be financially squeezed further and further. Are you willing to give up on public schools? On your local fire service? On roads that are safe to drive on?

Yet despite these facts, House Speaker Tom Leonard is gung ho to see this atrocity passed into law.

House Speaker Tom Leonard, R-DeWitt, is a supporter of the bill. He noted after Gov. Rick Snyder’s State of the State address, in which the Governor set a goal of increasing Michigan’s population, that the proposal could be one thing to do that.

“You look at Florida that does not have an income tax, and I know one of the big groups that we’re losing right now are the snowbirds, those that are retired. And I believe if we did eliminate or at least lower the income tax we could attract or keep some of those individuals here,” Leonard said. (Source — MLive)

Well, Tom, if you’re concerned about seniors leaving the state, you could start by repealing the new tax on seniors’ retirement income that Republicans (and only Republicans) voted for in 2011. That new tax has too many seniors making choices such as … do I pay for my prescriptions or do I pay the light bill this month? Should I buy food or put gas in the car? If you want seniors to stay, get rid of that rubbish.

Or, if you’re sincere about wanting to give families a tax break, maybe you could take back some of the billion-dollar tax breaks you gave corporations. After all, your promises that excusing wealthy corporations of their tax burdens would result in a flood of jobs with good wages to our state hasn’t really panned out, has it.

Another great idea would be to move Michigan from a flat tax to a graduated income tax. Our current tax structure results in higher wage earners paying much less in income tax as a proportion of their income than people who earn less. To learn more about this plan, which failed in the last session of the state legislature but may be introduced again, look here.

But this? This is suicide. And sometimes, it seems that’s exactly what Republicans want for our state. Next time you hear them boasting that they are the party of fiscal responsibility, remember that they are willing to promise the moon in order to get votes, even when they know it means letting our state crumble all around us.

If Rep. Leonard is your state representative, give him a call and tell him you won’t fall for this lousy tax scheme. In fact, no matter who your representative is, let them know that this will kill our state, and you won’t stand for it.

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