Friday, March 25, 2011

Republican Careers Won't Be Included in the Shared Sacrifice

Details aren't available in the "free" press (yet), but the Legislature has a counter-proposal on Snyder's budget, and it includes kicking the can down the road so they don't have to face the consequences of their actions now. Sacrifice is for the little people, you see, and current Republican lawmakers aren't about to put their own careers in jeopardy. Don't be silly. From a headline in Gongwer:

Senate Republicans will propose a scaled back version of Governor Rick Snyder's proposed tax on pensions and an altered version of Mr. Snyder's proposed corporate income tax, Senate sources said Thursday.

Instead of Mr. Snyder's proposal - immediately taxing all pensions at the income tax rate of 4.25 percent, the rate set to take effect October 1, with no deduction on a certain amount of income - the Senate Republicans will propose applying the tax only to future retirees. Those already collecting pensions would not face additional taxation.

Profiles in courage right there. Some retirees will be more equal than others - especially those that might come out and vote in 2012. Nothing divisive about that plan, right?

To pull off this stunt, the corporate tax will be set higher at 6.75%, and according to MIRS, there are additional budget cuts as well. Something about the children...

"The Senate Republican Fiscal Year (FY) 2012 budget will include a slightly higher business tax, a shift in kindergarten eligibility and $250 million in additional budget cuts, MIRS has learned."

More cuts for you, more political cover for them, and a convoluted and confusing tax code that still will pick "winners and losers" in the long run. But hey, as long as this group of lawmakers doesn't end up on the "loser" side, they will find some way to justify their cowardly behavior. Wait and see...

UPDATE 8:00AM: Tip of the hat to Chad Selweski at the Macomb Daily Tribune, who is already three steps ahead of the rest of the media on this story. Take a bow...

In a closed-door meeting that lasted less than one hour, members of the GOP leadership of the House and Senate proposed raising Snyder's 6 percent corporate tax to 6.75 percent, and to levy it on all but the smallest companies in Michigan.

Lawmakers contend that the amended tax, combined with additional spending cuts, would allow for the restoration of the broad exemption on pension taxes, which costs the state $900 million a year.

But Snyder refused to budge on the tax on pensions, according to Sen. Jack Brandenburg, calling it a fairness issue. He insisted that the exemption for seniors, the most generous in the nation, must go, just as he has proposed eliminating numerous tax credits and deductions for the business community. The changes in Michigan tax policy sought by Snyder are integrated into a controversial "shared sacrifice" plan that mixes tax reform with budget cuts.

Sounds like Governor Snyder needs to learn that government is not a business, that there are three branches of power involved, and he doesn't get to call all the shots here. How far will the lawmakers push the issue? Far enough to undermine the whole premise behind this draconian budget, and admit that business tax cuts are no guarantee of jobs. Check out the money quote from Brandenburg:

"I want to work with him, I do," said Brandenburg, the Harrison Township Republican who chairs the Senate Finance Committee, "but I can't because he has a $900 million money grab in there, and there's no guarantee that the tax cuts for businesses will generate a lot more jobs."

So now we have a Republican admitting that their entire economic theory could be wrong. Is that a first?