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Tax Cuts Prevail Again!

By Republican Yankee, Section News
Posted on Mon Jun 25, 2007 at 02:06:41 PM EST
Tags: (all tags)

If Tax Cuts Haven't Been Working, Why Is Governor Granholm Still Authorizing Them?

In the chaos that was the press cycle in Lansing last week in the aftermath of an agreement on an SBT replacement and the "street talk" about massive tax increases to fix the 2008 budget, it was easy to miss this one.

Governor Granholm and the MEDC tried to make as big of a deal as they could when it was announced that 2,700 jobs were going to be coming to Michigan as a result of 7 new projects. And how did this happen? Not with a tax increase, not by "investing" more in our citizens, not by "accelerating public projects". How did this happen?

WITH $12.3 MILLION WORTH OF TAX ABATEMENTS!!!

Examples such as these continue to show that Governor Granholm and Michigan Democrats simply can't have it both ways. Democrats want to tell us that tax cuts are not going to bring jobs to Michigan, but on the other side of their mouth (or body) they're telling you about the 2,700 jobs coming to Michigan from these now projects, or the 1,000 new jobs coming from Google (Google got about $38 Million in tax breaks). So what is it Democrats? Do tax cuts help or hurt Michigan's economy?

It has been clear from day one and it clearer now as to what Michigan Democrats are aiming to do and that is push through a MASSIVE tax increase. This was clear in the governor's budget. We didn't want to just raise taxes to fill the budget hole, no. We wanted to fill the budget hole and then finance 17 brand new government programs. But I guess that wouldn't have been too bad. After all, Michigan is not a high tax state right?

Not exactly my Democratic friends. Yes it is true that if you look at the Tax Foundation's overall tax burden rankings Michigan is right in the middle. But breaking that down to just the business tax climate we ranked toward the bottom (hopefully not anymore, it remains to be seen what impact the new MBT will have). The corporate tax index ranking is 50th, the property tax ranking is 35th and the unemployment tax ranking is 41st. These are all taxes that have HUGE impacts on businesses and therefore it can be argued that for a great deal of Michigan businesses, Michigan is a high tax state.

But if Michigan ranks so low in those areas, then why are we ranked in the middle overall? Well, because we have very competitve personal income taxes and a very competive sales tax. Michigan Democrats have spoken in favor of plans to change and/or increase both of these taxes.

So when you look at is the Democratic argument is "we're not a high tax state yet, so let's become one!"

But in the meantime, as tax cuts are demonized by the governor and others, I suppose the administration will continue to have no problem signing away business tax cuts or throwing a media parade for every job they create.

Does anyone else see the hypocrisy/stupidity in this?

< EXCLUSIVE: RightMichigan.com obtains working-plan of comprehensive Senate reforms | UPDATED: A morning of contrasts -- Michigan Dem priorities (BJ ) Askew? >

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Tax Cuts Prevail Again! | 18 comments (18 topical, 0 hidden)

Why do Republicans keep taking those tax (1.00 / 1) (#1)
by NoviDemocrat on Tue Jun 26, 2007 at 12:49:39 AM EST

abatments? Since most of the corporate world is Republican-inclined, why aren't they taking the principled stand and saying "No, we don't want those tax abatements. Save the money and give us all a tax cut." Instead, they grab every abatement opportunity that they can get and demand them if they aren't freely offered.

Here's a proposal to see if Republicans are really interested in lowering taxes. Let's abolish all tax abatement programs and similar programs that benefit big business and monied interests. Then let's direct the difference in taxes paid with the abolition of those taxes to reducing the rates of the SBT replacement and reducing the PPT and whatever other tax packages would be logical. Here's your choice - tax abatements for the well-connected or lower tax rates for everyone?

I'm going to pretend (5.00 / 1) (#2)
by Nick on Tue Jun 26, 2007 at 06:09:45 AM EST

you're serious and are actually interested in a discussion on the issue. I know you're not, but I'm going to pretend anyways. Maybe I have some deep-seeded psychological need to bang my head against a wall, I don't know.

In a vacuum I'd trade tax breaks and abatements for a lower rate every day of the week. It would make the tax rate easier to calculate and would, in theory, provide a boost to a lot of struggling businesses.

I think this is the argument the fair-tax proponents use on a larger scale.

Of course the trick is, we don't live in a vacuum. What's important to remember is that we live in Michigan and Michigan is one of fifty states. There are 49 other teams on the field at the same time competing for the same jobs or factories or small businesses or investments.

Were we to simply lower the rate and swear off tax breaks and abatements and incentives we'd be unilaterally disarming. We'd be out of the game.

The game by NoviDemocrat, 06/26/2007 09:45:15 AM EST (1.00 / 1)

now now (none / 0) (#3)
by Nick on Tue Jun 26, 2007 at 07:34:56 AM EST

Best behavior.

I enjoy troll bashing as much as the next guy but I find the most appropriate way to do that is to use the facts.

Remember, the truth will set you free. :)

no, you're right... it's a heck of a lot more (5.00 / 1) (#5)
by Nick on Tue Jun 26, 2007 at 09:54:58 AM EST

than just tax rates.

But one need look no further than the new Detroit tax breaks or heck, Granholm's presser in SE earlier this year praising the fact that tax breaks helped keep job losses to only several thousand.

Or Google.

None of that stuff happens without tax breaks and abatements. Period.

I, for one, am glad that we were able to use the tax break tool to keep damage down or bring jobs to Michigan.

But you don't like them as a matter of principle. I get that. I know what you're saying and where you're coming from. I think you're wrong but hey, people disagree every day. Still friends?

It's like kids and candy (1.00 / 1) (#6)
by NoviDemocrat on Tue Jun 26, 2007 at 11:44:25 AM EST

if there's candy sitting around, kids will take it even if they know they shouldn't. That appears to be the approach of many in big business. They say they oppose government hand-outs or government favoritism. But they just can't resist the candy. So they grab it while they can because it's there. But if we took away the candy, they wouldn't be tempted and would they really miss it?

You claim:

"None of that stuff happens without tax breaks and abatements. Period."

So does that mean those Mackinac Center studies that have said the opposite are wrong?

Usually... (5.00 / 1) (#7)
by Republican Yankee on Tue Jun 26, 2007 at 01:27:07 PM EST

I would entertain NoviDemocrat with a longer response to his inquiries (which are legitimate from time to time).

I will not do so this time as it is BY FAR the most asinine suggestion he has ever made on this board. You expect a business to decline an abatement so that the government can "save money" to finance a tax cut?

That might work if 1.) Government did spend like drunken sailors (GOP and Dems) and 2.) You and your Democratic friends weren't so hell-bent on raising taxes.

Ya, good point... by John Galt, 06/26/2007 01:47:06 PM EST (5.00 / 1)

Not the point (1.00 / 1) (#9)
by NoviDemocrat on Tue Jun 26, 2007 at 03:33:24 PM EST

Get off the blame game for a minute and focus on the discussion. I'm taking the position that we don't need tax abatements and if we got rid of them, we might be able to lower tax rates that you all claim are the salvation to our economy. Nick, on the other hand, is opposed to getting rid of tax abatements and says that we have to keep them in order to compete with other states for economic development. So which is the conservative position? Lower taxes? Or a system that, as some of you like to parrot, allows government to pick winners and losers and allows some businesses to pay a lot less than others for property taxes. Ironic, isn't it, that Nick's defending the big government position?

Hey there, Novi DumocRat (none / 0) (#10)
by sandmman on Tue Jun 26, 2007 at 04:15:27 PM EST

Thanks for enlightening us with your knowledge [?]

We'd have to have every state get rid of tax abatements in order to play on a level field.

Can you imagine the DumocRats coming up with that policy? Let alone ANY coherent policy?

"level playing field" by NoviDemocrat, 06/26/2007 05:02:57 PM EST (1.00 / 1)

Rambling and ignoring common sense. by John Galt, 06/27/2007 08:15:55 AM EST (5.00 / 1)

I'm not surprised... (5.00 / 1) (#12)
by Republican Yankee on Tue Jun 26, 2007 at 06:07:33 PM EST

That Novi is having so much trouble figuring out the "Real" conservative position on this issue. In his party, labor unions tell everybody how to think and what to say, so it's natural for him to see that people of the same party can have a disagreement.

What Novi has done (and he often does, because he's good at it) has gotten all of us off of the original point that I've been trying to make. The idea here is that Granholm is claiming "I've signed 93 tax cuts into law". Forget for a moment that it's not true, just take the statement at face value because what usually follows this is Granholm claiming that these tax cuts haven't turned the economy around.

Then she spins into her usual rhetoric about "investing", or raising taxes, being the key to turning Michigan's economy around(go the governor's website and listen to her radio addresses from February and March, or simply read her State of the State Address transcript from this year and you'll know what I'm talking about).

The point is, tax credits do work and she knows this. If she didn't, she wouldn't authorize $12.3 million worth of them for these projects. I think it's only fair put her in the same box she put us in and ask her how she plans to "replace" those $12.3 million. But we already know the answer to that and that is the projects will pay for themselves when they create jobs, stimulate the economy and pay the state taxes.

So enough with the STUPIDITY!!! I'm tired of it from Novi and I'm tired of it from Granholm. Tax cuts didn't turn the economy around, I don't think any amount of tax cuts could have avoided the trouble we're in now with the auto industry. But without the infamous "Engler Tax Cuts" Michigan would have a 10% unemployment rate instead of a 6.9% unemployment rate.

But maybe I'm jumping to conclusions. I mean nobody who is anybody has ever said that tax cuts help the economy. I mean, except that Alan Greenspan guy, and what did he know?

Hey there, Novi DumocRat (none / 0) (#13)
by sandmman on Tue Jun 26, 2007 at 06:31:46 PM EST

I believe we SHOULD get rid of tax abatements - along with business taxes.

Here's the same challenge - aren't there any LIBERALS/dumocRats willing to give up both?

"But you can't seem to be man enough" (none / 0) (#15)
by sandmman on Wed Jun 27, 2007 at 08:39:38 AM EST

Is Novi DumocRat a man? or a woman?

Is ND really Jenny, Jenny, Two-Penny Jenny?

Or Liberal Debbie Stabenow?

Look again (1.00 / 1) (#16)
by NoviDemocrat on Wed Jun 27, 2007 at 02:24:36 PM EST

"I don't see anyone here saying we shouldn't get rid of tax abatements."

Nick said exactly that. Or did you not read his comments? As for the argument that tax abatements are what's bringing job's here, prove it. We've had plenty of new or expanded businesses here in Novi and only one of them got a deal from the state. They rest expanded or located here without tax breaks, etc.

don't forget context, friend (5.00 / 1) (#17)
by Nick on Wed Jun 27, 2007 at 02:25:42 PM EST

A 0% rate would make tax abatements moot, wouldn't it?

If you lowered everyone's taxes to the levels some businesses get through abatements that'd certainly be a win win.

Prove it, Novi DumocRAT, prove it, prove it (none / 0) (#18)
by sandmman on Wed Jun 27, 2007 at 03:53:02 PM EST

You're a broken record, DumocRAT - "Prove it, prove it, prove it."

How about you proving that tax hikes will fix Michigan.

Put your money where your mouth is - or leave your head where we already know it is.

Tax Cuts Prevail Again! | 18 comments (18 topical, 0 hidden)

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