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It's Just Politics
Fri June 8, 2012
Just how does a politican decide whether or not to back an income tax rollback
Zoe Clark: It's Just Politics, I'm Zoe Clark.
Rick Pluta: And, I'm Rick Pluta.
ZC: And, Rick, I think it’s only fair to say that Democratic lawmakers at the state Capitol are not happy.
RP: Indeed, they’re mad.
ZC: Mad about the passage of an income-tax reduction.
RP: And they made their point known on the House floor.
ZC: So, of course, when it came time to actually vote, Democrats rallied together and voted a resounding, “No.”
RP: Whoa, whoa, whoa, Zoe, don’t go that far. Yes, they railed against it. Said it’s too little by way of “tax relief” – that phrase that gets tossed about when we’re discussing tax cuts -- for middle class families compared to all the tax exemptions and credits that were scrapped last year by Republicans in the name of tax fairness.
ZC: Democrats say this is the wrong use of $90 million earmarked for so-called “tax relief.” They say it’s also pretty paltry and that Republicans are just playing election year politics. But they still voted for it. So, what gives?
RP: Well, for one thing, they couldn’t stop it. Republicans have enough votes in their majority to pass what they want without cutting a deal with Democrats. So, for Democrats, it’s go along or vote against that so-called “tax relief.”
ZC: So, are Republicans playing politics?
RP: Of course not. Just ask Representative Jud Gilbert, who chairs the state House Tax Policy Committee.
Rep. Jud Gilbert: "I kind of take exception with the idea that this is somehow political pandering... election year politics."
ZC: So, it’s just a coincidence, of course, that one of the income tax rollback bills is sponsored by Republican Representative Ed McBroom.
RP: Who represents a 51 percent Democratic seat in the western U.P. and can expect a tough re-election fight... a coincidence.
ZC: And, another bill by Representative Holly Hughes.
RP: A Republican in a 52 percent Democratic seat.
ZC: And the new bill to reduce the income tax every year for the next six years... well that, too, belongs to a Republican: Representative Nancy Jenkins.
RP: In a marginally Republican seat – 53 percent – but is expected to face a tough re-election fight.
ZC: Not at all political, five months before the November election. Glad that’s settled. Rick, let’s talk a little bit about this new tax-cut double-down. Representative Nancy Jenkins’ bill would cut the income tax rate to 3.9 percent by 2018.
RP: This is a page pulled from the playbook of Governor John Engler. In 1998, he was faced with a dilemma. The 1990s were a fiscal delight.
ZC: A financial cornucopia!
RP: The economy was so good, revenue was pouring in. The Lansing political class was able to cut taxes and increase spending at the same time.
ZC: Those were the days.
RP: But by 1998, the governor and the Legislature had really cut taxes to the point where the state could not cut them any more and still fulfill its obligations.
ZC: This was a problem for a man who liked to be called “Governor Tax Cut” and had proposed a tax cut in every one of his State of the State addresses.
RP: So, John Engler solved his political problem by proposing a string of income tax cuts that would play out over five years – would continue even after he left office. Problem solved.
ZC: Except, it created another problem, in the 2000s, the Michigan economy tanked, revenue choked off.
RP: So here we are again with the same basic idea. And Democrats say it’s just more politics.
ZC: So, they’re against it.
RP: Well, sort of. Actually they say it was their idea first. They proposed a bigger reduction in the state income tax right this year, but Republicans said “no,” stole their idea, and then tweaked it to spread it out over a longer period of time.
ZC: But it’s still the same basic idea. So, they’re ready to support it?
RP: Whoa, whoa, whoa… No one said that. Democrats won’t commit to vote for it.
ZC: So, the lesson of the day might just be: if you can’t beat ‘em, join ‘em.
RP: And, if you can’t join ‘em, try and beat them even harder.
ZC: Rick Pluta is Lansing Bureau Chief for the Michigan Public Radio Network.
RP: And, Zoe Clark is the resident political junkie at Michigan Radio.