Monday, January 22, 2007

Tax Time Twist and Shout: No real answers from the pundits or the Pubs

The propaganda war over taxes heats up. The MI GOP and the Detroit papers are increasingly working themselves into a lather over this issue; it would be fun to watch if it weren't so darn scary and misleading.

Saul is the low-hanging fruit on this tree; let's start with him.

Gov. Jennifer Granholm's hand-picked Emergency Financial Advisory Panel isn't ready to deliver recommendations to repair Michigan's lingering budget crisis, but some of her critics believe there's little mystery to what they'll conclude: imminent tax hikes.

Michigan Republican Party Chairman Saul Anuzis issued a letter Thursday urging Republicans on the panel to disavow tax increases and reaffirm their core Republican roots of fiscal conservatism. The panel includes former governors, Republican William Milliken and Democrat Jim Blanchard, and other bureaucrats Anuzis believes have tax-friendly records.

"She wants to use you to pass the buck. She wants you, as members of her panel, to say that there is no alternative but to raise taxes. Then, it isn't her fault," Anuzis wrote. "Help the people of Michigan see that there is a better way."

OK, Saul, I'll bite. What is the "better way"?

Please. Tell us. You obviously have the answers to the questions that haven't even officially been proposed yet, so, enlighten us as to what this "better way" is that you speak of.

You would think that Saul would lay it out for us on his blog. You would be wrong.

Oops. Seems Saul is busy cavorting in Washington, kissing up to Tony Snow, and dazzling us with insights such as, "President Bush is doing a tremendous job in so many areas".

Saul didn't bother to mention, exactly, what those areas are, which is a shame because we all are kind of curious at this point. With a statement like that, you wonder where he would go with the tax issue.

So, no help there.

Dawson "A kinder, gentler version of the Detroit News" Bell hit the presumptuous heights of actually adding up "a day in the life" for us taxpayers. He came up with this statement which reaches beyond a socialist's wildest dreams.

The attraction of expanding the sales tax to services is its potential to generate big cash -- up to $8.7 billion a year if virtually every imaginable service was taxed.

Every single one! Imagine! Because he wants you to!

Although he did balance it a bit with this- in theory-

A tax on services is viewed as more voluntary than other levies, such as income and property taxes, because -- in theory -- the decision to buy is discretionary.

Expanding sales tax to services is arguably more progressive, meaning the wealthy share a greater burden than the poor because they use more -- and more expensive services.

But wait! Dawson goes on to cite the famous examples of attempted service tax increases that failed. Note when these took place.

The experience in two other states, Florida and Massachusetts, where sweeping expansions of sales tax to services were enacted (in 1987 and 1990, respectively) may also be instructive. Both were inspired by the kind of reasoned analysis that has characterized the discussions in Michigan.

Both, when implemented, were public relations disasters that were mostly repealed.

20 and 17 years ago. Trying to figure out the relevance to today, here, but we'll play along.

Only a few states have a broad-based sales tax on services with Hawaii leading the pack, including on health care.

Here is where the handy 2004 chart comes in play. When Dawson says "few", he actually means that 25 states tax over 50 services, and 6 tax over 100, 5 of them well over 100.

In fact, Michigan came in at number 38 with 26 services taxed as of 2004.

Dawson didn't mention that part.

And I was rather surprised that Dawson totally ignored this- from May of 2003, shortly after Granholm was handed this bag of tricks in the first place-

In Washington, this may be the era of tax cuts and more tax cuts. But in statehouses around the nation, it's increasingly a time of big tax increases.
Faced with budget shortfalls and mounting pressure to avoid cutting social services during economic doldrums, more state lawmakers are abandoning their usual reluctance and raising taxes, some boldly enough to risk their political futures in the process. Alabama, New York, California, and Nevada are moving to raise taxes by record amounts.


This doesn't mean states are boosting income taxes across the board. They're targeting higher-wage earners instead. But the magnitude of the increases in some states is stunning. In many cases, sales taxes are going up, affecting whole state populations.

Not sure how all that turned out, but my guess is that many went through, 'cuz everyone else is doing just fine according to the Republicans.

Apparently at a time when other states were shoring up their revenue, we were still cutting. That was probably a bad idea, but strangely enough no one is pointing that out.

So, no answers from the Freep, although feel free to join in the feeding frenzy in the comments section. Wish there was a way to turn those off.

Always save the best for last. Nolan "Perhaps it's time for that restraining order" Finley weighs in once again- laying the burden of this all at the governor's feet, ignoring the role of the legislature, offering up teacher's healthcare once again as an example (what is this obsession with the teachers, anyway?), and setting up Nancy Skinner, of all people, as a convenient target to knock down.

Not even going to bother to quote Nolan; he's becoming too redundant.

Alrighty, then. No answers there, either.

The hope is that they get this all out of their system right now so we can get down to business soon. They can Twist and Shout all they want, but the fact is they are offering no real solutions to the problems that face us.

But what else is new.