Tag: Prop 5

Yessirree.  Article V, Section 18 is merely PLPD coverage on the family car.  Out of pocket repair bills is exactly the exposure that every Michigan family faces with handing the keys to their little darlings behind the Lansing wheel.  What's that?  A smart family should know to also carry collision, or, Full Coverage if entrusting others with risks to the family vehicle?  Well, with just checking the old inbox, that is the message that the good folks over at the Michigan Capitol Confidential are driving home on Prop 5.

The idea behind a Tax Limitation Amendment is to make it more difficult for the political class to pilfer the pockets of taxpayers. Research -- most notably by scholar Mancur Olson -- has shown time and again that in democratic nations the wishes of an electorate are often ignored by narrow special interests that seek costly "favors" from the government. Politicians all too frequently accommodate those favors (be they subsidies or tariffs or spending hikes or other items) in part because their contributors and powerful constituents support them. Increasing taxes also is often a path of least resistance.

Constitutional restrictions are an effective way to handcuff politicians and stymie the special interests who lobby them for more money. Academic research on balance seems to show that such restrictions do check the growth of government and tax burdens, too.

Amen!  So, the natural question must be asked, why is it that the biggest opponent of Prop 5, Rick Snyder, a CEO, and CPA mind you, is behaving like a teenager who incessantly tells dumb 'ol mom and dad who are liable for his actions that he can text and drive?

One might think that would be the common sense shared by our state leadership, and given the fickle nature of Michigan, an absolute winner for protecting our future generations from abuses like those suffered 2002-2010.  Its a known conservative-Republican postulate.  Harder to raise taxes = better government.

But Republican platforms, principles, goals, don't seem to be in line with one prominent politician.  Michigan Governor Rick Snyder, answering a series of questions on the ballot proposals uses the canard that the MBT would not have been eliminated if prop 5 was already in place:

"Snyder: This isn't just about tax increases. On the face of it, some people may think this is a good thing. But this really would impact many fashions of tax reform or actually tax reductions, because it talks about any increase in rate or base. To use one illustration, we would still have the Michigan Business Tax today, which I don't think anyone would want. That was a disaster. That didn't pass by a two-thirds margin, and this requirement would have applied because we replaced it with a 6 percent net income tax for corporations that was simpler, fairer and more efficient. "

Of course, forgetting to say that with a prop 5 type of rule in effect,  the MBT would NOT have been enacted in the first place.  Granholm's hands would have been tied.  She would have had to face the tough cuts that this state needs in its social program structure and government accountability for expenditures.

In fact, some might even look so far back as to when the Michigan imposition of a state income tax of 2 percent on individuals, 3 1/2 percent on corporations, and 6 percent on financial institutions was enacted.

Yeah, I went there.