Sunday, December 10, 2006

Fantasy vs. Reality: Republican tax cut policy falls apart

The LSJ has a great editorial that plainly spells out where the "cut business taxes" philosophy comes unglued under the harsh light of day. Republicans operate under the idea of "what should be" and never take into account "what is"- and it is there that they always fail. Time to hammer that home once and for all.



Cutting revenue is not the answer to our problems. It will make things worse.



Voters chose investment over tax cutting by wide margins on Election Day. Now it's time for lawmakers to move quickly and replace the recently eliminated Single Business Tax with a broad-based, low-rate business tax that replaces all of the $1.9 billion generated by the tax today - along the lines of what has been proposed by Gov. Jennifer Granholm.


Here comes the cognitive dissonance that will rip your mind apart when you really stop and think about it. Republicans complain about all of the following issues, but yet want to slash funding? How does that work?



Seriously. It's hard to understand how they think it will solve anything to continuously cut revenue, when those cuts have created some of the very problems they tried to use as a weapon during the campaign.



Both parties campaigned on investing in key state services. Republicans and Democrats said the layoff of 1,500 law enforcement officers since 2001, forced by cuts in state revenue sharing to our local communities, had gone too far.



Both parties agreed we need to put more state dollars into higher education. Both parties said health care needs to be a priority.



Both parties said we need to do more to ensure foster care children are protected by the state, and that parolees are policed more carefully.



The Detroit Free Press has been running some hard-hitting articles on our dysfunctional prison system, and even the Detroit News has called for more spending in foster care. Everybody wants more money for schools. So-



Both parties now are challenged to fund those programs. Full replacement of the SBT is the first step in creating an investment plan for Michigan.



Now ask yourself which party has come up to the window with a way to fund these things. Republicans are still calling for more tax cuts, but yet won't tell us which of the areas above would pay for it.



When put on defense, they still fall back on the "Michigan is a high tax state" argument.



False.


After a decade of tax and spending cuts, Michigan's tax burden is below the national average. And our economy has not responded. Further tax cuts are not going to create prosperity in Michigan. Of the 10 lowest tax states in America, eight have lower per capita incomes than Michigan - and the other two in recent years have voted to raise their taxes to invest in the services and infrastructure that help attract and grow the businesses that are prospering today.



It doesn't necessarily follow that "low taxes" translates into success. In fact, the opposite seems to occur.



The states and regions that have high per capita income also tend to be those states with higher than average tax burdens. That's not a surprise.



In his recent paper, "A new Agenda for a New Michigan," Michigan Future President Lou Glazer identifies key traits of successful regions: Places that value education, ensure central cities are attractive to talented young people and are welcoming to all.



These successful regions - Chicago, New York, Seattle, San Francisco, Minneapolis - are not known for low taxes. They are known for creating the conditions desired by talented individuals that are the lifeblood of businesses competing in the knowledge economy.


Or, "Cool Cities", as someone once said. Heh.



Will Republicans ever listen to reason? Their refusal to work on the MBT proposal tells us that they will not. They will kick this to the Democrats and then cry about "raising taxes", while still insisting on fiscal policy that has no basis in reality.



How much do you want to bet? You can almost guarantee that is what will happen next year when they finally do get to work on the MBT.



Let's ignore them when they do, or better yet, point out the facts over and over in the hopes that they finally "get it". If they don't, the public certainly will.

If Republicans don't want to live in the real world, time to move on without them.