One line that generated some attention in Gov. Rick Snyder’s State of the State address on Thursday was his call to reduce the tax burden on low- and middle-income families. I’ll reaffirm here what I said last Monday — that you don’t make a major change in the tax code because you have a one-time surplus. But you can and you do if you can show that it’s good overall policy, rather than just a reaction to a circumstance of the moment.
When Snyder took office in 2011, he overhauled the state’s tax code in a way Democrats didn’t like because it lessened the tax burden on corporations while eliminating some exemptions for individuals – most notably the exemption of pension income from the state income tax, which is an exemption offered by only three of the 41 states that have state income taxes.
It was hardly a radical policy change, and the modest improvements in Michigan’s economic performance since the changes were enacted would tend to affirm that it was a reasonable move. A lot of conservatives, including quite a few voices on this page, were unhappy with Snyder because he decided not to cut the state income tax at that time from 4.35 percent to 3.9 percent — as originally proposed — but he chose to be cautious and make sure he could consistently balance the state budget. The tax rate did drop to 4.25 percent last year.
Now that the budget has been balanced or run a surplus four years in a row, Snyder is expressing a desire to reduce the tax burden on the very people Democrats keep insisting are paying too much taxes. How are Democrats responding to that?
Chad Livengood and Gary Heinlein of The Detroit News report:
Democrats dismissed the governor’s call for tax relief as an attempt to shade over higher tax bills some families and retirees have received as a result of Snyder’s elimination of several tax credits, exemptions and deductions in 2011.
“This is primarily a campaign promise … after he put everyone through the wringer,” said state Sen. Coleman Young II, D-Detroit.
So let me see if I have this straight. You spend three years complaining that a certain group of people need to have their taxes cut, and criticizing the governor because you think they are paying too much. Then he proposes to do the very thing you’ve been demanding, and you dismiss it as electioneering?
No one knows exactly how Snyder and Republican leaders of the House and Senate will seek to grant the referenced tax relief, as he indicated the details will be forthcoming in February. It may be that he goes ahead and agrees to the permanent cut in the withholding rate that conservatives wanted three years ago. I’d be surprised if he restores the pension income exemption because he rightly believes you don’t make tax policy better when you make it more complicated.
But whatever the proposal turns out to be, the Democrats’ initial reaction just shows to show they are not happy unless they are not happy. Demand something for three years, only to see the hope of getting it, and instead of enjoying the policy win you complain — presumably because you’ve had a talking point ripped out from under you.
It’s a funny thing about election years. Candidates make proposals they hope will help them get re-elected, which is always the first thing political junkies and pundits point to. But if the proposals are good ones and actually make people better off, then it’s good that they were made, and maybe those candidates deserve to be re-elected. If Michigan sees Snyder’s first term end with consistently balanced budgets (without the gimmicks of the Gov. Jen Granholm era), job growth and lower taxes both for corporations and individuals, I’d say that would constitute a pretty strong first-term record, even if it took the entire four years to make some of it happen.
But it’s tough when someone takes away your reason for complaining. But buck up, guys! You’re Democrats! This is an area in which you are endlessly resilient. I’m sure you’ll have no trouble finding other reasons not to be happy.