Uncategorized — January 31, 2012 at 9:41 am

State Rep. Mark Ouimet whitewashes new tax on pensions


GOP supports tax hikes? Only on the 99%

A couple of weeks ago, my state representative Mark Ouimet posted an op-ed at Heritage.com titled “New plan treats income of retirees just like that of working seniors”. In his piece, he whitewashes a new tax on pensions that will adversely impact a significant number of our state’s seniors.

The plan is about creating jobs for Michigan families while safeguarding Michigan’s seniors, low income families and small businesses.

The plan is a long-term solution to Michigan’s structural failures. We are making tough, necessary decisions to put this state on the path to recovery. As always, please give my office a call if you have further questions about the tax reform plan.

It’s a pretty major shift to have Republicans suddenly touting the benefits of tax increases but, considering this particular tax increase hits a vulnerable population, it’s not particularly surprising. Their most vocal opposition to increases in taxes seems to come only when wealthy people are impacted. The laughable part is the claim that this is somehow part of their jobs program.

I felt that Rep. Ouimet’s whitewash deserved a rebuttal. My response was printed on Sunday in a piece titled “Tax plan helps corporations at the expense of state’s seniors”.

My state representative, Mark Ouimet, recently wrote an opinion column titled “New plan treats income of retirees just like that of working seniors.”

In his piece, he explained the new tax on the pensions of Michigan senior citizens that goes into effect this year. However, Ouimet left a couple of things out of his explanation.

First, this new tax will cost Michigan seniors $225 million in 2012 and $343 million in 2013.

These increased revenues, paid in part by this new tax on our state’s seniors, are being used to fund a tax break for businesses to the tune of $1.6 billion by 2013. Another $1 billion was stripped out of our statewide school funding.

On top of this, many seniors will take an additional hit from the new Republican budget as the Homestead Property Tax Credit is reduced by $200 million.

Ouimet seems to suggest that retirees will simply need to start working again to make ends meet – all to fund billions in tax breaks for corporations.

Second, while Ouimet acknowledges that the intent is to make business taxes so low that companies will move to Michigan, he fails note that low taxes are simply not enough.

What attracts businesses to a state far more successfully is to build communities; vibrant communities with good educational opportunities and amenities businesses desire.

Dan Gilmartin, executive director of the Michigan Municipal League, describes this as “The Economics of Place.”

In an interview last fall, Gilmartin said tax incentives are “not a good long-term sustainable economic development strategy.”

He continued: “It puts communities and regions in competition with each other instead of promoting regional cooperation. We need to foster a more entrepreneurial environment, encouraging the growth of businesses by ones and twos where they will invest in the community. We have learned that we need to think more regionally, support more home grown businesses for long-term sustainability.”

Attracting sustainable economic growth in Michigan is not simply a matter of lowering taxes, particularly if it is paid for on the backs of students and senior citizens.

Ouimet and his Republican colleagues continue to pursue a failed agenda that favors corporations and wealthy Michiganders at the expense of our most vulnerable citizens. Meanwhile, those in the upper income brackets, the so-called “1 percent”, continue to enjoy opportunities and tax breaks not available to most of us, often paying significantly lower tax rates than “the 99 percent”.

At the end of the day, we should be striving to rebuild our communities, support our seniors, invest in education, and prioritize the renewal of our urban areas.

As President Obama put it so well in his State of the Union address this week, this is not an issue of class warfare or envy; it is an issue of fairness.

A race-to-the-bottom approach involving only cutting taxes [on businesses and the wealthy] is not the answer to reviving Michigan’s economy, no matter how friendly a face Representative Ouimet and our Republican legislators try to put on it.

Chris Savage