Michigan Democratic Party, Taxes — July 24, 2015 at 10:52 am

Citizen-initiated ballot proposal would bypass Michigan legislature & governor to fix roads by restoring corporate tax fairness


Michigan legislators met for two days this week (without taking attendance or casting any votes) then folded up shop and went home for a one-month recess. They did this as our state’s roads continue to crumble and without passing any legislation to deal with the ongoing road and bridge repair crisis.

UPDATE: @EmptyWheel reminds me that they did actually take a vote to declare July “Ice Cream Month”. So they aren’t completely useless.

With the inability for state Republicans to take action on the abysmal state of our roads – we have the fourth worst roads in the country – a group of citizens is taking matters into their own hands. Knowing Gov. Snyder would never sign legislation that would rescind some of the massive tax break giveaways to corporations in our state, yesterday they announced a citizen-initiated ballot referendum to raise corporate taxes from 6% to 11% which will raise nearly $1 billion, all of which would be directed to road repair.

Tom Lutz of Citizens for Fair Taxes put it this way:

They promised us that giving away billions of dollars in tax cuts to corporations and CEOs would lead to more better work for Michiganders, but the only thing they did was make life harder on Michigan’s middle class and working people.

They raised taxes on seniors and retirees. They raised property taxes on working families and the middle class, and they even raised taxes on families with children. But none of that money went to capital or key funding for infrastructure. It was simply given to corporations who took it as profit.

Corporations are getting away with not paying their fair share and Michigan families are shouldering the burden. That’s wrong and this ballot proposal will bring fairness back to families who have paid more than their fair share.

Here’s how the plan is described on their website FairFix.org:

Our plan is simple. Corporations received over $2 billion in unfair and unjustifiable tax giveaways that didn’t work. Our plan would recoup about half of those cuts – nearly $900 million – and put the money into our crumbling roads and bridges by raising the corporate income tax from its all-time low of 6 percent to 11 percent. Small businesses would not be impacted.

It’s a simple, straightforward plan, but the corporate CEOs and their lobbyists in Lansing won’t like it. But as a result of the tax shift, corporate taxes have been lowered by 80 percent since 2011, and middle class and working families are being asked to sacrifice more and more to make up the difference. That’s wrong. Michigan needs a fair roads fix and our plan provides it.

The facts regarding corporate taxes are pretty astonishing. Again, Citizens for Fair Taxes spells it out:

Over the last four years, corporations have been handed $2 billion in tax giveaways without the guarantee they create any good jobs and then paid for it by increasing taxes on families and seniors by $1.6 billion. This tax scheme was the single biggest shift in money from middle-class families and individuals to corporations in Michigan’s history.

Today, Michigan’s corporations pay less than they ever have in taxes through the main business tax and barely contributed $400 million in 2014 according to the State of Michigan, 2014 Comprehensive Annual Financial Report. According to an analysis by the Detroit News in May, Michigan now generates more income from “sin taxes” like smoking and drinking than from corporations. Meanwhile families saw their taxes skyrocket 25 percent to $8.0 billion.

According to a report by the Pew Charitable Trusts, none of these monster tax breaks has helped Michigan workers. In 2000, the median household income was $61,551 adjusted for inflation. By 2013, it dropped to only $48,273, an eye-popping 21.6% reduction.

This ballot initiative, along with others covering things like an independent commission to fairly redraw gerrymandered political districts and a graduated income tax, may well be our only way to fight back against failed and harmful Republican policies and laws. While they put appropriations into nearly every law they pass to prevent citizens from taking action, in these areas we have opportunities.

I spoke with newly-elected Michigan Democratic Party Chair Brandon Dillon and asked him how he feels about the Citizens for Fair Taxes ballot proposal. “It’s not a surprise that citizens are leading the charge to restore corporate tax fairness,” Dillon told me. “Republicans have given them lavish tax breaks and paid for it on the backs of taxpayers, including their most recent plans.”

When he and I talked earlier this month, Dillon said that some ballot initiatives could be good focal points for engaging Democrats. I asked him if this an example of one of those ballot proposals and, if so, if the MDP is likely to get involved. “The MDP has a process for determining what proposals it will support so it’s too early for me to know the level of support we’ll give,” he said. “But I won’t be surprised if Democratic groups across the state join in to support making sure that large corporations in Michigan are paying their fair share so that we can get Michigan’s roads fixed once and for all.”

Ballot proposal language has already been submitted to the Board of Canvassers. The group will begin circulating petitions once it is approved. They must collect at least 252,523 valid signatures within 180 days in order to put the matter to voters on the 2016 ballot.

When your conservative friends trot out the propaganda from the Chamber of Commerce and other corporate front groups that these higher taxes will kill Michigan’s resurgence, ask them what impact crumbling roads and dangerous bridges are having. Because to suggest that our rapidly deteriorating infrastructure doesn’t come with an economic cost to our state is to be totally disingenous. We CAN have nice things in Michigan, but they don’t come for free and it’s time we stop throwing everything onto the backs of the poor and middle class families in our state, particularly while we’re handing out billions in tax breaks to Big Business.