Wednesday, November 16, 2011

Snyder Administration Repeats the Lie That They Have Ended Business Tax Credits

New study from the Center for Budget and Policy Priorities came out yesterday showing that Michigan, along with Wisconsin and New Jersey, raised taxes on the poor as states looked for ways to increase revenue in the face of massive budget deficits. The AP kindly points out that in Michigan, this was a trade-off for more tax cuts for business interests.

In Michigan's case, low-income families will see their tax breaks shrink starting next year by about $260 million annually while businesses will get a $1.1 billion tax break starting in January and a $1.7 billion tax break the year after.

When asked for a response to the study, the answer from the administration was "trickle-down!" And you got your Medicaid, so what are you complaining about?

He said earlier this year that the state needed to make cuts to balance the budget and noted no cuts were being made in Medicaid programs providing health care to low-income working families. He also has said the business tax cuts will create employment opportunities.

"More and better jobs are at the heart of the governor's plan to improve and strengthen our economy so ALL can prosper and benefit," Sara Wurfel, a spokeswoman for the first-year Republican governor, said in an emailed response to the report.

While many an expert and thirty years of experience has pointed out that it's consumer demand and not tax cuts that actually creates jobs, the Snyder administration is going to happily ignore that fact and continue on with the standard spiel, all the while taking money out of the hands of the consumers that are most likely to spend it. That's just willful ignorance and a blind adherence to ideology. No surprise there. What really is annoying though is the insistence that they have ended business tax credits, when they have done no such thing. Here it comes:

"It was also about ending exorbitant business tax credits that were jeopardizing our future and ensuring a level playing field for all industries and sectors," she said. "It was about creating a structurally balanced budget that could be a building block for the future."

This was said on a day that they handed Meijer's a $3.3 million tax credit to build a new store in Detroit. They also gave Grand Rapids $4.7 million for a downtown urban market. These are both great ideas - it's the lying when making excuses for taxing the poor that is so infuriating. Michigan Radio did ask the right question to a MEDC spokesman, and they pointed to the new $100 million cap and said, "those limitations will not be in place until the end of this calendar year." Oh. Well, until then, pass out the candy, right?

Anyone want to place any bets as to how quickly they add more money to the MEDC pile next year for more tax credits? You can probably guess late spring, maybe summer, when we will hear the call that they have to a) cut property taxes (unless they start on that after Thanksgiving break when you are distracted by the holidays) and b) give more money for incentives so they can continue to "ensure a level playing field" and create "more and better jobs". Wait and see.

As has been pointed out before, they are quietly putting back the Renaissance Zone tax deduction now. MEDC is clamoring for more money already to hand over to business, and there is no question that they are going to need it if they want to compete with other states. These "exorbitant business tax credits" are slowly making their way back into the system - and that is, for the most part, being ignored.

The real question here is: Should all of this come at the expense of those who can least afford it? THAT is what should be answered. And they can't do it without resorting to the usual trickle-down explanations, as evidenced above.

The next question should be on everyone's mind. They are going to need more money for their plans.

So, who pays the next time around?