Earlier today on “State of Nature:”
“I won’t provide specific ideas for this budget, as I’m only slightly informed about the specifics of the consequences of such moves.”
Well, forget that. I’m a flip-flopper. Case in point: at one time I stood by Pepsi, and frankly, I’m not so sure I can tell the difference between it and Coke. My soul is ridden with contradictions. One time, I’m pretty sure I imagined a round square that was both red all over and green all over, at the same time, in the same respect. I passed out immediately after, and my hair now parts down the other side of my head.
Anyway, after a little time with budget figures, it’s time to advocate a state budget plan. It’s all happening folks.
Much of my information comes from Sunday’s Oakland Press, the article I can’t find online.
An increase in the state’s income tax to 4.6%, the proposed Democratic rate, would cost a married couple with two kids making $42,000 an extra $188 for the year. A married couple with two kids making 100 g’s would have to pony up $594 for the year (Dept of Treasury).
From all the Republican rhetoric, I thought the increase would be astronomical, making parents sell their kids into the European sex trade to pay the rent. Actually, a married couple, assuming both adults make daily coffee runs, on $42,000, would each have to give up a coffee every 4 days. Sure, giving money to the government sucks, but the government helps pay for the poor and the elderly to have health care. The government pays for police and firefighters. It also fixes roads, hands out driver’s licenses, and, surprisingly to me, distributes hard liquor.
If in 1999, Engler and Co. would not have cut the tax rate from 4.4 to 3.9 when the economy was booming, we might not have the mess we have now. A tax increase will help the structural deficit that exists in the state (see below). If the structural deficit is not fixed, then we’d have to go through all of this again, assuming Michigan’s economy doesn’t drag the state to the bottom of the Great Lakes. Then we’d need to pass legislation for boats. Or rafts. Shit, that wouldn’t get done either.
A tax rate of 4.6% would likely raise $1.1 billion, letting the cuts in programs need only to cover (only, ha) $700 mil. A progressive tax or a sales tax would help most. But that might be a future project.
Here we can cut the lifelong health-insurance given to legislators whose years in the legislature are limited to 8 years maximum. I’m all about universal health-care. Again, that’s for another day. But if we can’t get it, then 8 years of doing a bang-up job in the state house shouldn’t afford you it either.
After that, smaller cuts to programs will have to be made. Those, I’m not going to touch. That’s what the legislature can vote on. They get paid to do that. I’m gonna grab some food.
Your $42k/yr family could save more than $188/year brewing their own coffee rather than go out to coffee houses. On that salary, they probably do anyway, but that’s irrelevant. By making the switch, coffee shops lose patronage. Somebody is losing money, for simplicity’s sake, let’s say that they are paying the employees less: now they are losing from their own increased taxes, and from lost business due to other’s lost taxes. Spreading the loss out over a variety of industries does little to help because it is the health of the economy as a whole that really matters.
Raising taxes makes Michigan less attractive to mobile high-income individuals, and as a result, to companies looking to build new factories or headquarters. Despite the existing infrastructure in Michigan, companies are increasingly looking elsewhere for their new factories, leaving Michigan’s economy to flounder.
I’d like to talk about healthcare more, but I should get on to my real work soon so I’ll skip over that. Suffice to say that the government has shown itself to be inefficient and often incompetent. Business has shown itself to be greedy and corrupt, but free markets should keep their greediness in check, and laws/governmental oversight can curtail corruption.
(as an aside, I’m not entirely convinced by (economic) liberalism either… I’d like nationalized healthcare, but… not with our government. I’d like a whole new setup. But again, I digress.)
You have to look at both sides. I agree with you though, I think companies would prefer a state with a fiscally sound budget and higher taxes to the other. And as to the first point, presumably the state will spend all this money, so it makes it back into the economy anyway. Plus a sounder budget might increase consumer confidence, which would be better off–cuts to education have caused increased tuition, which has probably led to decreased spending as families save up for college.
My point being that I absolutely agree with you, but there is more to it.
Can I just throw that at the end of my post instead? I’m pretty sure I mostly agree with you. A few questions though:
What is the tax burden in other states? Does this even raise the levels to the levels of other states?
I wholly believe a structurally sound budget would increase confidence. Cuts to higher education plus an inefficient government would seem to drive away potential graduates to other states, who Michigan needs to reformulate its 20th century economy.
With zero training in economics, and a stomach yearning for food, my post was entirely incomplete, and I acknowledge that. Your reply lends great credence to my oft-held belief that 30 second soundbytes and 2 sentence policy initiatives never tell the story.
Soon enough, State of Nature will throw up a philosophically sound argument for universal health-care, lacking the specific logistics. That will be a good day for discussion.
Michigan is one of only 11 states with a full-time legislature. And they are the 2nd highest paid state legislators in the nation, behind only California. State of Nature said they get paid to decide on the “little” programs. Unfortunately, they are obviously not doing their jobs or we wouldn’t be facing a state government shutdown!
Yes, I agree we need to raise taxes. Yes, I agree we need to cut government spending. And another piece to the puzzle is reforming government to contain spending, not just cutting programs.
The fundamental problem is, we’ve elected prima donas—all they do is huff and puff, politically posture, and blame the other side. Enough! How about this to start things: next election, vote against all the incumbents; they obviously are not up to the job. Second, how about eliminating the legislature altogether? That would save $54.3 million in their inflated salaries, benefits, and staffers. Wow! Only $1.69 billion to go…