Monday, October 25, 2010

Republican Wealth Redistribution

Michigan is looking down the barrel of a large shift over to Republicans this year. Republican Governor, Republican Senate, Republican House. And as usual the conservative footsoldiers are beating the drum of how we'll now see lower taxes.

Ahh...remember the last time Michigan had a Republican Senate and a Republican Governor? No? I'll take you back...

...good times. 1994. Kurt Cobain was still alive for a couple more months and grunge was the mainstream underground music of choice. That was also the year the tax cutting Republicans RAISED Michigan's sales tax from 4% to 6% so that everything we buy is now taxed more. Why did they do that? To finance a property tax cut for land owners.

For the poor and middle class land owners, it was a wash.

For the poor to middle class renters it was a massive tax HIKE.

Oh, but for the wealthiest land owners, it was a massive and regressive give-away.

That's 1994, the Michigan Republican Governor and Senate financed a tax cut for the rich by taxing the poor and middle class. They TOOK that money from the middle class and handed it over to the DeVos family, and other Michigan millionaires and billionaires.

The Republicans. They taxed nearly everything we buy: diapers, toilet paper, deodorant, toothpaste, dog food, pots and pans, cooking utensils, towels, furnace filters, brooms, photographs...

The Republicans weren't just innocent bystanders. They weren't just complicit in this idea. They were the ones in control. They were the ones who passed the law. And Engler SIGNED it into law.

And now Michigan has among the most regressive state tax systems in America where the poor and middle class pay a HIGHER percentage of their income in taxes than the rich do. A flat tax would actually be a step UP.

Most of Michigan's income and local taxes come from the state's poorest residents, resulting in a regressive tax that "no one" would intentionally design, according to a report released Wednesday by the Institute on Taxation & Economic Policy.

While non-elderly residents who make less than $15,000 per year typically pay about 9 percent of their income toward taxes and those who make between $32,000 and $54,000 pay nearly 10 percent, the very rich pay about a third less, said the study, titled: Who Pays? A Distributional Analysis of the Tax Systems in All 50 States.

The rich, defined as those with average annual incomes of $1.1 million, typically pay about 6.4 percent toward taxes, the study said.

"No one would ever design an income tax with lower tax rates for the best-off taxpayers," said Matthew Gardner, executive director of the institute and the study's lead author. "But that is exactly what Michigan's tax system overall does: it allows the very wealthiest individuals to contribute less of their income, on average, than middle and lower-income families must pay. In other words, Michigan has an unfair, regressive tax system."

Billions of dollars sucked from middle class and poor households in 1994...and what happens when the Dems, years later, propose a 1 cent tax on sodapop to help raise funds to keep city services like schools and police going?


I'm very impressed with the Republican leadership. How they manage to smile and say they're cutting taxes while RAISING taxes is an impressive feat. Even more impressive that people believe them. Or that they can claim Obama raised taxes for the middle class when he actually CUT $300 billion in taxes for the middle class in America...when 2009 had one of the lowest middle class tax rates in decades...

Well, it's just impressive is all.

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