Bad tax cuts?
As free marketers and libertarians, of course RLCers are for tax cuts basically all the time. In the previous post, we pointed out the hypocrisy in the Democrats supporting tax cuts for their favored industries while opposing them for those of us outside of these industries. But James Hohman points out an example of a recent Michigan law cutting taxes in a bad way–yes we said cutting taxes in a bad way–similar to last year’s filmmakers’ tax cut.
Hohman notes that aside from the fact that this newest law only cuts taxes for favored companies (battery manufacturers), it also “refunds” taxpayer cash to these companies when their new tax credit exceeds their yearly tax bill. In other words, Michigan directly subsidizes certain industries through this new law.
Far be it from us to point unfair criticism at anyone. We’ve said nothing to the effect of ‘the Democrats are responsible for this bad policy’ for a reason: almost everyone voting on this law supported it. (Three Republican senators voted the right way, but none did in the house.)
If Democrats reject the utility of tax cuts…
…Then how do they justify a “50% write-off for equipment purchases” for Hollywood studios? Or to put the question a different way, why do they pass things like the Michigan Film Incentive (which also cuts taxes for film producers)?
Look at what people do, not necessarily at what they say, to discern what they really think. Then ask your favorite tax-credit loving Democrat why, if tax cuts are good for Michigan when they’re given to some businesses, they aren’t good for all of them.
Mike LaFaive on more problems with the Michigan film tax credit.
A good start
A third of the Democrats in the state senate agreed with all voting Republicans that the 22% tax “surcharge” they placed on businesses just two years ago should be repealed. They chose to eliminate it relatively slowly, such that the tax stays in place for the next two years (tough to cut the billion dollars it takes in a year in a budget of over $40 billion, apparently), but it’s certainly better than nothing.
They tried this at the end of last term, but the state house failed to pass similar legislation. This is a good start for the Senate Republicans.
“Stimulus”
The US House passed a “stimulus” bill tonight over the no vote of every Republican (even Michigan’s). Some essential reading on this monstrosity:
The WSJ crunches some numbers (”only…12 cents of every $1, is for something that can plausibly be considered a growth stimulus…this bill was written based on the wish list of every living — or dead — Democratic interest group.”).
David Harsanyi simplifies things (”worse than all the pork or the massive de facto tax hike (someone pays, always) is the mass acceptance that we can stimulate the economy by buying our way out of trouble.”). [HT: Reason.]
Arnold Kling, earlier this month slammed the idea of spending our way to prosperity (“You say that the multiplier for government spending is 1.57. Really? Over what range?…If you use a constant multiplier of 1.57, the right answer [to the question of how much to spend] is [the highest amount option]. Yet we know that this is not the right answer. At $100 trillion in additional government spending, the United States would be operating like Zimbabwe.”)
More state interference with business
“[P]oisoning customers and employees.” That’s what some say restaurant owners are doing when they permit smoking in their establishments. In Michigan’s past legislative session, several bills were introduced that would prohibit such a decision. The regulators lost their fight to dictate business conditions last session, but they’re back at it again.
Leading the charge this time is a Republican. Unfortunately, he’s not the first Republican to introduce a bill to ban smoking.
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One of these Republicans is considering a run for governor. Hopefully he doesn’t try to fool voters by hypocritcally claiming that he wants to lighten the burden of intrusive government for Michigan businesses.
MI’s best congressional members
Have you ever wondered how Michigan’s congressional delegation stacked up to your ideal? How they compare to each other? How the Democrats compare to the Republicans?
Check out our legislator rankings page for answers to these questions.
Do you have complaints about the standards by which we measured our Congressmen and women? Great. Help us out by contacting us about recent or upcoming votes in either Congress or the Michigan legislature that are important to you. We’ll incorporate important state legislature votes in the Michigan rankings we’re working on. And we’ll pass important Federal votes on to the volunteer who does the RLC’s Federal rankings.