Pensions & Retirement Benefits

Michigan’s Tax Charade

No Michigan Tax Deal Is Ever Worth The Paper It Is Written On

Since our devious Governor and his RINO caucus pulled out all the stops to quash the HB 4001 decrements in the state income tax last Thursday, it has dawned on Michigan politicians that the optics of the SB 111 – 115 Dan Gilbertville tax breaks just got real ugly. You can’t hand $ 1.8 billion of state revenue over to politically connected developers after stiffing the public at large without gruesome consequences. This is going to decrement some Senators’ campaign finance committee balances.

No one should fault Speaker Leonard for putting HB 4001 up for a losing vote. Bottling up and fiddling legislation behind closed doors until a winning margin is assured is not an exemplar of government transparency. Brits and Europeans may regard such shifty back room shenanigans as the hallmark of sophisticated political process, but here in America constituents want to know exactly how they are being represented. Thursday’s vote told us more about the RINOs in the Michigan House than years of deceitful political media articles and reports.

Thank you Speaker Leonard for fostering genuine political transparency.  Long overdue in Michigan.

It now appears that killing both tax reductions was the plan all along. Bridge Magazine and the Michigan Municipal League just launched a trial balloon to gut the Proposal A constitutional amendment of 1994. Proposal A limited the tax depredations of government employees acting through their local units of government, a popular activity in Michigan’s more leftward big cities and counties. The sales tax was increased 50%, but property owners got some constitutionally protected tax relief in return.

Local government employees and their Democratic political puppets want to renege on the 1994 Proposal A tax deal. Well, not entirely. Just the constitutionally protected property tax relief. No one is offering to restore the 4% sales tax rate. What was it JFK said about negotiating with the Soviets? “We cannot negotiate with people who say what’s mine is mine and what’s yours is negotiable.” Public employees and their subservient Democratic politicians have a lot of gall claiming that President Trump is a Russian stooge and a neo communist tyrant to boot.

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Who Rules Michigan?

The Administrative State or the People?

The titanic political struggle unfolding in Washington is sucking the oxygen out of Michigan politics, but is analogous to the central political struggle which has been playing out here in Michigan for 48 years. Political media breathlessly report on a struggle between liberal Democrats and conservative Republicans. This struggle is not between Democrats and Republicans, liberals and conservatives, nor RINOs and true believers. The Democrats, liberals, and RINOs are completely discredited in Michigan, as they are across most of the United States. All that remains of them is jammed into the Hillary archipelago.

The present political struggle is between the people and the administrative state. Call it bureaucracy, deep state, or administrative state: they are unelected government employees, their agents in the media, and the select beneficiaries of government largess. Their opponents in this struggle are the majority of Americans and Michiganders who pay the price for the administrative state; a now seething mass whose ascendancy was a rude surprise to the administrative state.

The outcome of the struggle in Washington is yet to be determined, but in Michigan the administrative state is clearly winning despite its total responsibility for the Flint water fiasco. The administrative state owns Governor Snyder body and soul. The administrative state will stop at nothing to manipulate the Michigan Legislature when the chips are down. Refractory (but innocent) legislators are expelled before legal process while cooperative (but guilty) legislators sit unfettered until legal process is completed.

How else can you explain the PA 177 of 2015 road tax package, indistinguishable from the soundly trounced Proposal 2015-01? Or the bogus Detroit bankruptcy which somehow neglected a $ 491 million financial hole which will haunt the city with a vengeance in 2024? Half the city’s annual budget. Or the refusal of Michigan government units at all levels to even consider tax reductions due to the simmering public employee pension catastrophe? Those pensions enjoyed by members of the administrative state are but a distant memory to the Michiganders who pay them.  Indeed, all of Michigan’s units of government are jacking up fees to get around Headlee Amendment taxation limits.

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Southeastern Michigan’s Regional Transit Authority Millage Vote

When The RTA Property Tax Passes, It Will Be Imposed On All Four Counties - Even Those Which Reject It

rta-logo-jpgThe 20 year Regional Transit Authority, 1.2 mil property tax plan is on the ballot in four Southeastern Michigan counties, on November 8th. The public doesn’t seem to realize that this property tax will be imposed on all four counties, even if one or more of the counties reject it. A big change from past millage requests specifically designed to shove this tax down anti tax Macomb County’s throat. Michigan’s tax-and-spend establishment really wants this tax to pass.

Ford Focus SThe RTA master plan is $ 1.22 billion in new fare revenue, $ 3.1 to $ 3.3 billion in new property taxes, and $ 1.7 billion in new Federal & State subsidies. A grand total of $ 6 billion, more or less. Let’s say that the relatively modest increase in vehicle revenue miles provided by the RTA master plan – 32% – doubles their ridership. That $ 6 billion cost, divided by 78,327 new passengers, equals $ 76,602 per passenger over the 20 year period. You could buy every one of those 78,327 new riders a new car and pay for their fuel and insurance as well.  Instead, RTA will treat them to the urban mass transit experience.

Urban buses and other mass transit vehicles have a special ambiance with their diverse ridership and high level of maintenance. This experience is enhanced by the faint aroma of pepper spray, plus the full array of odors you would encounter in a hospital emergency room during an overwhelming disaster – except for disinfectant.  Bus scheduling allows those too poor to visit a casino the opportunity to gamble daily on punctuality at their workplaces.

Why riders are unwilling to pay 20% of the cost of mass transit, and why mass transit funding has to be extracted from taxpayers using the threat of foreclosure.  On top of this, mass transit advocates have to raid road funding and vehicle registration fees to deliver their ‘service’.  No free market economics here, despite strong support from the Chamber of Commerce types.

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Strange Bedfellows Explained

Hillary's Plan to Loot Your 401k Account

tony-james-blackstone-groupInternational Business Times and Yahoo Finance just posted headline stories on the plan created by Hillary’s Wall Street masters to loot your future retirement savings. Today’s voluntary 401k savings plans will be replaced by mandatory retirement taxes on all private sector workers – and their employers – which would be turned over to Wall Street hedge funds for investment:

Hillary Clinton And Wall Street: Financial Industry May Control Retirement Savings In A Clinton Administration
By David Sirota and Avi Asher-Schapiro, IBT, 10/19/16 at 12:50 AM

While Hillary Clinton has spent the presidential campaign saying as little as possible about her ties to Wall Street, the executive who some observers say could be her Treasury Secretary has been openly promoting a plan to give financial firms control of hundreds of billions of dollars in retirement savings. The executive is Tony James, president of the Blackstone Group.

It is a plan that proponents say could help millions of Americans — but could also enrich another constituency: the hedge fund and private equity industries that Blackstone dominates and that have donated millions to support Clinton’s presidential bid.

The proposal would require workers and employers to put a percentage of payroll into individual retirement accounts “to be invested well in pooled plans run by professional investment managers,” as James put it. In other words, individual voluntary 401(k)s would be replaced by a single national system, and much of the mandated savings would flow to Wall Street, where companies like Blackstone could earn big fees off the assets. And because of a gap in federal anti-corruption rules, there would be little to prevent the biggest investment contracts from being awarded to the biggest presidential campaign donors.

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Financial State of Michigan – 2015

41st Place Among the States

tia-methodologyYou have probably read the Mackinac Center’s excellent works on Michigan’s government finances, much of which they release through Michigan Capitol Confidential. Top quality analyses, but parochial in the sense that they don’t place Michigan’s government finances in the context of the other American states. An Illinois 501(c)(3) organization, Institute for Truth in Accounting does, and has come up with a useful metric – taxpayer burden – by which you can rank Michigan financial status relative to the other states. No accounting degree necessary.

Suffice it to say, you will not be reading any of Truth in Accounting’s work in Michigan’s nitwit, cheerleading media.

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