You probably read about this weekend’s big protest in Madison, or the most recent bonkers parliamentary maneuver. As a result of the ongoing protests, Gov. Scott Walker’s hamfisted politicking, and the effective political drama of the Senate Democrats’ Illinois sojourn, Wisconsin has been arguably the biggest story in the region, or even the country.
Similar legislation is on the docket in Indiana, and Athenae at First Draft rounds up some news from Missouri and Ohio. But the fiscal and economic proposals coming from Michigan governor Rick Synder–and his GOP colleagues in the legislature–stand to be just as controversial as Walker’s, if not more.
In a party line vote, and despite impassioned speeches of protest by the body’s Democratic minority, the Michigan Senate approved legislation that threatens to take over and even dissolve local governments that refuse to balance their budgets by breaking labor contracts:
* A bill has been introduced that would cut the state’s Earned Income Tax Credit.
That last part is kind of an amazing overreach tacked onto the back-end of what already was a huge freakin’ overreach.
What I am referring to is the recently passed bill giving newly elected Governor Rick Snyder, unprecedented power to declare any town, city, or school district in fiscal emergency, and to appoint a fiscal manager to such a town or school district.
The fiscal manager, which can be a corporation, then gains the following powers:
- Authority to dismiss all or any of your elected officials
- Authority to privatize all or any city services, including schools
- Authority to break any and all contracts entered in to by your city via your elected officials, including collective bargaining contracts
- Authority to disincorporate your town or city
- Authority to merge your school district with another school district
Critics argue that the deep cuts in school funding and revenue sharing proposed by Snyder and Republican legislators could push many cities over the brink into bankruptcy, dramatically increasing the number of cities under the control of state-appointed emergency managers that will, after the passage of this bill, have unprecedented and — many argue — unconstitutional powers.
So I want to make sure I have a hold of this concept.
We give the Governor sweeping authorities to completely dissolve duly elected town governments, as well as the authority to completely rip up contracts & collective bargaining agreements those towns put in place while simultaneously placing a corporation in charge of everything?
Are you freakin’ insane?
I mean really, really, really insane?
It is bad enough that politicians from both sides of the aisle live by the credo “no crisis should be left unexploited”, but gimme a f’in break. Now we have to artificially create those crises THEN exploit the living hell out of them.
On top of those draconian measures, Snyder’s drastic changes to the states tax code have a great many of his constituents calling for his recall just two months after he took office.
However “simple, fair and efficient” Gov. Rick Snyder says his overhaul of Michigan’s personal income tax is, it’s still a whopper of a tax increase for hundreds of thousands of Michigan residents.
For politically active seniors, the increased tax bill could easily run into the thousands of dollars — sticker-shock territory.
Michigan is only one of four states with an income tax that exempts retirement pensions from the levy. Economists have said it is fundamentally unfair to tax the income of wage-earners, but not the retirement income of seniors who rely on many of the same state services as everyone else.
Given the demographic trends of an aging population, moreover, the percentage of Michigan residents with no income tax liability is growing.
Snyder is citing both the fairness and those trends in justifying a new tax on pensions that would also generate half the money he needs to finance a $1.8 billion business tax cut.
But politics, not economics would well drive the votes of lawmakers being asked to reformulate the tax code for some 1.1 million seniors that for some could amount to the largest single tax increase in modern Michigan history.
A senior couple with $77,500 in overall retirement income, $48,000 in pension, $2,500 in other income, and $27,000 in Social Security benefits — that would remain untaxed — would pay $1,840 in new income tax, according to examples crafted by the Michigan Department of Treasury.
That couple would also lose about $720 in refundable homestead property tax credits because Snyder’s plan ends eligibility for the credit at $70,000 in household income, down from the $82,650 current cutoff. It adds up to nearly $2,600 in new tax liability.
A couple with $42,000 in total retirement income and a $2,250 property tax bill would pay about $700 more, including $544 on $20,000 in pension income. While they’d still qualify for the homestead credit, it would be $156 less under Snyder’s plan.
Ten days after Snyder proposed nearly $1.9 billion in income tax changes to finance a similar level of business tax reduction, Republican lawmakers taking concerned calls from seniors back in the district haven’t rushed to endorse the plan.
In relying on higher taxes on seniors to finance a business tax cut he says would transform Michigan’s troubled economy, Snyder is essentially asking for sacrifice from grandparents to improve the job prospects of their children and grandchildren.
“When people talk about how they’re affected by this tax act,” Snyder told state association executives in a speech last week, “what I ask you to do is empathize with them that they may be asked to give up something.”
“But after that change is made, are they being treated fairly? Are they being treated in a fair fashion with the rest of the citizens of our state?” Snyder asked. “I think you’ll find the answer is yes.”
Indeed, a married couple with one child, $45,255 in income and a $2,250 property tax bill would gain $134 in homestead credits through the change. Under current law, non-seniors get a 60 percent refund on the amount of property tax that exceeds 3.5 percent of their income, but seniors get 100 percent back. Snyder’s plan would equalize that so every credit recipient would get 80 percent.
But a family of four earning $25,000 would see an $856 increase in taxes, according to an analysis by the Michigan League for Human Services. They’d pay $450 in income tax that gets refunded now under the Michigan Earned Income Tax Credit that Snyder’s plan would eliminate. And they’d lose another $406 in cash back that the credit currently provides.
There is Republican support for eliminating the MEITC, which costs about $355 million in fiscal year 2011, but the toughest aspect of Snyder’s plan will be taxing seniors because to be frank, politicians fear old people more than they do poor people.
“When you’re an elected official, at the bottom of the list of constituencies you want to take on is seniors because they vote frequently and they have time on their hands,” said Jeff Padden, a former legislator who runs Public Policy Associates in Lansing. “Senior citizens matter a lot in elections.”
The elimination of MEITC will put more of a tax burden on lower-income families, alienating yet another group of constituents that Snyder has left completely unmentioned. Maybe it’s because he can’t make that whole “fairness” argument for this part of the bill huh?
It’s unclear whether the business groups whose members would be the biggest tax beneficiaries of Snyder’s plan will mount the lobbying effort required to push through the less popular income tax replacement revenue.
Not surprisingly the shills to corporate America, er, I mean the Michigan Chamber of Commerce backs all aspects of Snyder’s plan, says the chamber’s chief tax analyst Tricia Kinley.
“We can support the direction the governor has taken on the budget and all the tax reform. The attitude is that it’s the right and fair thing to do.”- Michigan Chamber of Commerce
Republican leaders in the Legislature were still “studying the plan” when they moved quickly to introduce everything in the House in one single bill to cover both the business tax cut and the income tax changes.
Lawmakers who oppose the pension tax will be told to fill the resulting hole some other way, through specific spending cuts or other revenue.
“The pension part is going to be the most politically difficult, but the governor’s proposal is focused on the policy side of things and that’s how we’ll try to address it as well,” said Ari Adler, spokesman for House Speaker Jase Bolger, R-Marshall.
“Some (seniors) might be opposed, but we’ve heard from others who are willing to help out,” he said. “We are taxing the youngest generation and there are no jobs for them, so no wonder they’re moving out of state.”
Snyder and his GOP goons want us to accept everything they say at face value, but with each passing day it has become harder and harder to do.
The latest display of insincerity came when, after having gauged how incredibly unpopular these measures are, he had to pull this out of his Corporate-Bastard-Bag-of-Tricks. Detroit Free Press:
LANSING — One $100 bill could block voters from a chance to stop more than a billion dollars in higher taxes.
Whether you think it’s a dirty trick or a smart move, a House bill to implement Gov. Rick Snyder’s proposal to eliminate tax credits and exemptions contains a $100 appropriation — enough to make the plan immune from a voter referendum.
In 2001, the state Supreme Court ruled that legislation with a state expenditure — even just $1 — can’t be repealed by voters.
Additionally, an amendment to require Emergency Managers to hold monthly public meetings to let people know how they are governing was rejected by Senate Republicans, along with proposals to cap Emergency Manager compensation and require that those appointed to run school districts have some background in education.
As you might guess, taking on unions and pension recipients, who represent two very reliable voting blocs, hasn’t been good for Snyder’s approval ratings.
At least a half-dozen websites, Facebook pages and community groups have already sprung up, preparing to recall Snyder and his colleagues in July (the earliest possible date state rules allow).
I have been telling you folks for a while now, this is an all out assault on the middle-class. Unions, elderly, students, lower-income individuals. The list of people taking the brunt of this whole “we all need to make sacrifices” schtick being peddled by the GOP and their corporate masters goes on and on.
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war and we’re winning,” he told a group of students.
“Our middle class is collapsing. For over 30 years America’s MOST RICH have been waging war against the middle class and poor. They have hidden their secret agenda in a fancy term called Supply Side Economics. Our rich have argued that if we reduce their taxes, lower government regulation and increase privatization that ALL Americans would prosper.”
The legendary businessman isn’t buying that load of shit however, going as far as to refer to the position as a “fraud”:
“The rich are always going to say that, you know, just give us more money and we’ll all go out and spend more, and then it will trickle down to the rest of you,” he told Christiane Amanpour on This Week. “But that has not worked the last 10 years, and I hope the American public is catching on to this fraud.”
I too hope that people are catching on, before it is too late.