SB 69 passed yesterday, but not before it was rightfully questioned by those who still have some sort of moral compass and understanding of both state budget matters and the power of symbolism. The bill raises the cap of CEO pay in regards to an MBT credit - currently set at $180,000 a year, Cassis wants to raise that up to $210,000. And by God, if we don't do that, then every small business CEO in Michigan is going to close their doors and pack up and leave because they just can't keep their business open unless they get more tax cuts.
First, the sanity, in the form of Mickey Switalski:
I have to ask who will benefit from this cut. Current law allows credits if the owners, officers, or CEOs in the corporation earn $180,000 or less. This bill would have us believe that people are hurting out there, and they can’t make it on $180,000. So Senate Bill No. 69 raises their compensation limit to $210,000 so that they can keep bread on the table.
Now people trying to keep their businesses open don’t usually do that by giving themselves a $70,000 raise. I don’t really mind people making almost a quarter-million dollars, but I don’t think we need to give them a tax break. As has been said, what about the people who are unemployed? This bill actually reduces the number of new jobs a business must create in order to qualify for this tax credit, from 20 down to 8. It lowers the capital investment from $1.25 million to $500 billion.
Is our goal to increase employment or increase eligibility for tax cuts? This bill changes the base from the credit and the value of the new jobs created to the value of the tax. We have reduced the incentive to create new jobs. So please join me in opposing these bills.
He summed it up the best by providing the reality behind the numbers in this bill. Cherry and Jacobs both stood up as well; Jacobs questioning the amount on salaries in comparison to everyday people such as teachers, police, nurses and firefighters, not to mention all those in poverty, and also mentioned the cost to the budget. Cherry was more succinct about what the bills implied, questioning whether business would actually leave if they didn't get this cut, and, "I believe that it is the wrong time to be sending a message that CEOs should be paid more."
According to MIRS (who admittedly has a flair for the dramatic), Cassis sounded "outraged" and took "umbrage" to the suggestion that tax cuts for the upper middle class might not be such a prudent step at this point in time. From the journal:
I am really perplexed. The good vice chair of Finance is asking that this bill be gutted—absolutely gutted. Let’s take away any help for the real job providers in our state. The very ones whom she is talking about, whose families are in distress over either having lost a job or on the brink of perhaps losing a job.
I just don’t think there is any place in this great hall, this Senate Chamber, to be advocating pure class warfare and that is what I heard. In eliminating the small business credit, one is reminded that the revenues in this state have been falling precipitously. The Governor couldn’t even ignore this when she said, and I quote, “We’ve got a drop in revenues that is breathtaking.” Well, why? Because people are unemployed and businesses are closing their doors all over our communities. They need help, and they need a positive response from all of us who sit here and represent them.
When all you have is a hammer, then the answer to every problem is "more tax cuts". Never mind the "more tax cuts" would hurt quality of life in this state and business would be more apt to leave at that point, never mind that cutting revenue means that someone will have to pay for these tax cuts, and usually that person is a child or the sick or the elderly on the other end of Nancy's "class warfare", but pay reality no mind. We left that planet long ago when it comes to Bush economics.
And oh yes, let's not forget the film credits, the be-all end-all go-to excuse for all the Senate tax cutting behavior.
Of course, when the film credits were passed without hardly any discussion of the fact that they could have a substantial potential impact on the budget, now $100 million is a consensus figure. I see very few of my colleagues standing up and saying let’s take a look at that $100 million giveaway that could more than be utilized to help a broad base of thousands of small businesses stay afloat.
The arguments don’t hold any water. I wish they did because then I would think it was appropriate to stand up and argue against our small businesses today when they are suffering the way that they are. Not only is it impractical, but it is incredible.
Portrait of a woman obsessed with a failed ideology. If we just keep doing the same thing over and over, then surely one of these days we will see different results, right? Switalski protested all three tax cut bills yesterday, and on the final one he had this to say:
Last month, over my objection, we passed Senate Bill No. 1 which phased out the Michigan business tax surcharge and eliminated about $600 million in revenue without identifying the budget cuts or replacement revenue. I said at that time it was fiscally irresponsible and bad tax policy. Well, these three bills we are just concluding our votes on today represent more bad tax policy that will cost us about $300 million today.
Once again, we have neither identified replacement revenue nor made spending cuts. So after two months of bad tax policy, we have created about a $1 billion structural deficit.
But Mickey, if you argue for fiscal responsibility, that's class warfare. It's obvious that as long as this group of Republicans run the Senate, the spirit and philosophy of the Bush years will live on.
But keep fighting anyway. We will get back to responsible behavior someday. We will have to.