Nate Smith-Tyge (@smithtyge):
State Representatives Jim Townsend (D- Royal Oak) and Jeff Irwin (D- Ann Arbor) have introduced a resolution in the State House to amend the Michigan Constitution to allow for a graduated state income tax. As a loyal reader of Fix the Mitten, I’m sure you’re aware that we have supported this concept for a long time and include it in our good government reform platform/vision. A progressive income tax just makes sense – it gives 95% of tax payers a tax cut and provides additional revenue to stabilize the General Fund. This would ensure adequate funding for higher education, local revenue sharing, public safety and corrections, environmental protection, consumer protection, basic social services, and even free up enough money for partially funding road repairs.
Representatives Townsend and Irwin’s idea is also supported by a large majority of voters. I encourage you to explore the cross-tabs of this poll as the results might surprise you. Even a majority of Republicans support moving to a graduated income tax. Moreover, a plurality of self-identified tea partiers support a graduated income tax. Once people find out that a graduated income likely means a tax cut for them and ends the boom-bust cycle of state budgets they get on board with the concept. Not only is it a much more fair tax system, it is also is a win for the economy as study after study has shown that middle-class tax cuts actually do lead to economic growth (because middle class and working people actually spend that money in the real economy).
The question becomes why would anyone oppose this? They, of course, already have their mouthpieces in the Michigan Chamber and Mackinac Center but who are these two outlets speaking to/for? And the answer is the 5% that would see a slight tax increase or those fueled by blind ideology and partisanship. Let’s address each of these groups separately.
I should first say that not all of the 5% would oppose paying a little more in state income tax for better schools, safer and more livable cities and townships, and better infrastructure. In fact, a lot wouldn’t mind as well because they have good accountants and realize what they pay in state income tax is deductible on their federal return. As for the others in that 5% that oppose the change, not much will change their mind. And that’s fine, a policy that works for 95+% seems like a good trade off and Dick DeVos can always just get a few more people at the bottom of the pyramid to make up the difference.
However, the biggest group of opposition will come from those that would benefit from this change and willingly vote/work against their own economic self-interest. I have no idea why ideology and partisanship trump practicality in the minds of these individuals. They would rather go on believing in the ideas of Uncle Milty, dead Austrian economists, and a sociopathic hypocritical novel writer than actually accepting reality (and having a few more dollars in their pockets). This faith-based (in the Adam Smith sense) economic belief in supply-side economics and “job-creators” has been roundly refuted by reality and actual economic data. Yet it still has many adherents that value their faith in these dis-credited theories seemingly above all else. Is it a miss-guided notion of freedom or a belief that maybe someday they’ll be in that 5%? Again, the data is pretty clear they won’t, especially if they continue to support policies (based on these theories) that expand economic inequality.
This is fundamentally what this policy debate is about – economic inequality. Will we embrace a solution that helps the vast majority of people while also asking the wealthy to pay a little more (which they can very clearly afford to do)? We will hear all about wealth re-distribution, socialism/communism, and class warfare from the likes of the Chamber and Mackinac Center. But what these folks won’t tell you is that the wealthy have been reaping all the benefits of these very scary words they like to use to get people to act against their own self-interest ever since Saint Ronny of Hollywood came to power in 1980. There has been massive wealth re-distribution and class warfare as the result of government policies (i.e. socialism/communism) for close to five decades in this country – it’s just that the Chamber and Mackinac Center don’t mind it because it has all gone to the wealthy. I think it’s time we had some fairness in our state (and country) and stemmed the tide of wealth inequality. A graduated state income is a good start and makes sense from the vast majority of Michiganders.
Of course, this means in the current environment in Lansing this idea is a “non-starter.” So, it will be up to like-minded folks to test the waters and see if we can get this on the ballot in 2016. Not only will this be good policy it might also help get Democrats out to the polls (especially if there’s any candidate/campaign fatigue after 2 years of non-stop presidential campaigning). Many in Lansing argue a ballot question is the real focus of Reps Townsend and Irwin and that makes sense. We just can’t have a repeat of 2012 when too many ballot questions caused a lot of voters to vote “No” on everything out of reflex rather than real consideration.