tax cut

IRS Form 1040.
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Michigan has been cutting taxes for the past 20 years. The key selling point has been that slashing taxes will create economic prosperity.

A new report by the former head of the state Treasury Department's Office of Revenue and Tax Analysis, Douglas Drake, says these tax cuts have instead drained Michigan of economic life, with our per-capita income rank tumbling, and our unemployment rate way above the national average.

Charles Ballard is an economist from Michigan State University.

*Listen to the full show above.

Lester Graham / Michigan Radio

LANSING, Mich. (AP) - An income tax cut seemed inevitable just two months ago, as Michigan Gov. Rick Snyder and Republican lawmakers offered up and even began passing rival plans to use some of a budget surplus for tax relief before the 2014 elections.

Now plans for a tax reduction are waning and shifting instead to addressing pothole-ridden roads.

   Snyder says he's open to dropping his tax plan to set aside more money for transportation. He attributes the shrinking interest in tax relief among legislators to drivers who voiced frustration with crummy roads.

Recently I criticized the Legislature and State Senator Jack Brandenberg for wanting to roll back state income taxes. He has a bill to cut the rate from 4.25% to 3.9% over three years.

For an average taxpayer, that would mean a tax cut of less than a hundred bucks a year. But it would leave the state with nearly a billion dollars a year less, when it already doesn’t have enough money to maintain the roads or provide other services.

After this bill sailed through the Senate Finance Committee earlier this month, I said I thought it was irresponsible election year pandering.

Later, Sen. Brandenberg called me.

He was warm, earnest, had a sense of humor, and said I had gotten it wrong. He wasn’t pandering in the least, he told me; this is what he genuinely believed. He said this stemmed from an agreement to roll back taxes going back to when Jennifer Granholm was governor.

I thought his calling me took class, and it was clear he really does believe in this. Brandenberg has no need to pander; he is certain to be reelected this fall to a safe Republican seat.

Steve Carmody / Michigan Radio

Flint’s mayor says his and other Michigan cities need more revenue sharing dollars from the state.

Mayor Dayne Walling delivered Flint’s “State of the City” speech yesterday. Walling outlined a lot of plans for Flint's future. But he says, without more money from the state, delivering basic services will continue to be a struggle.

“Our local communities were the ones that took the longest, most permanent cuts. And we need to be first in line,” says Walling.

But revenue sharing does not appear to be high on the legislative agenda in Lansing.

Steve Carmody / Michigan Radio

Lansing Mayor Virg Bernero used his State of the City speech Thursday to make a pitch for state funding to repair local roads.

Mayor Virg Bernero says the city of Lansing plans to spend three million dollars this year to repair pot hole covered roads in the capitol city. 

But the mayor says the city would have to spend five times that much each year for a decade to fix all of Lansing’s road problems.

In his speech, Bernero called on state lawmakers to use part of the state’s billion dollar budget surplus to help repair local roads across Michigan.

Steve Carmody/Michigan Radio

LANSING, Mich. (AP) - The Michigan Legislature formally kicked off 2014 with no heavy lifting. But voting could occur this week, when lawmakers also gather to hear Governor Rick Snyder's annual State of the State speech.

Budget work will dominate the first half of the year. Legislators have nearly $1 billion more to work with than expected, and one priority is spending more on road upkeep without raising taxes.

Lawmakers also are talking up an election-year tax cut, perhaps in the state income tax.