House Democrats Vote to Raise Taxes... Again!

Cross-posted on Right Michigan at www.RightMichigan.com.

Yesterday the Michigan House of Representatives and the Senate painted an awfully vibrant picture of the difference between sending Democrats or Republicans to the legislature.  It is nearly impossible to find a candidate these days that agrees with us on every issue one-hundred percent of the time, but even the GOPers we break with four times out of ten are going to do the right thing more often than not.

Case in point, the wildly divergent approach to tax policy in Lansing.  The Associated Press reports on Thursday’s Senate GOP led efforts to reign in the job-killing surcharge on the Michigan Business Tax.

A Republican-controlled Senate committee on Thursday voted to phase out a surcharge on Michigan business taxes over three years… Phasing it out over three years would reduce revenue by $120 million in the budget year that starts next week and $660 million in fiscal year 2011-12.

Senate Majority Leader Mike Bishop describes the move as the first step towards eliminating a Democratic passed tax increase that makes Michigan increasingly uncompetitive with job makers.  Jennifer Granholm trotted out Liz Boyd to tell reporters the plan was DOA unless Republicans also opened prison doors to let violent offenders loose on the streets.  House Speaker Andy Dillon responded too… technically.

He’d like to kill the entire surcharge next year, he told reporters.  Well, not him, exactly.  Us.  He’d like us to do it via a “broader ballot proposal.”  Translation: Democrats aren’t going to vote to cut your taxes.  And, of course, we all remember what happened the last time Andy Dillon started talking about creating ballot proposals.

Besides, the Democrats in the House had their own tax policy initiatives working through the legislative process yesterday.  Democrats voted yesterday to raise property taxes across the entire state.  You read that right.  8.9 percent unemployment and skyrocketing foreclosure rates amidst a worsening national financial crisis haven’t deterred the left from making you pay more.  

Read on…

The vote was on House Bill 6162, sponsored by Representative Steve Tobocman.  Under the scheme those homeowners who are struggling to pay their mortgages would be granted a pretty sizeable tax break.  In fact, they might not only have their entire property tax liability waved this year, they could have it refunded retroactively for the last few years.

Great idea, right?  I’ll officially volunteer to be the last person to ever criticize real live tax relief, especially for those who are hurting under Jennifer Granholm’s economy.  Unfortunately, with Michigan Democrats in the House it is never that simple.  These guys and girls are just plain sinister and they are always working an angle that screws the rest of us.  Some of our more intrepid readers may have even caught their devious little scheme right away.

Providing property tax relief for those who live in poverty is a great idea.  Here’s the catch… little things like school bonds are effectively in fixed amounts.  They’re going to get their cash and they’re going to get it through your property taxes.  That’s just the way they’re designed.  Let’s put it in easy terms.

Say you have an approved bond for one-hundred dollars and you have one-hundred homeowners.  Each homeowner pays one dollar.  Now lets say you want to exempt fifty of those homeowners from paying their share but the bond still, by law, will receive one-hundred dollars.  Suddenly the fifty who continue to pay the tax are paying two dollars.  Their liability just doubled.  Same principle at work here.

The House Democrats plan grants “relief” to homeowners who are delinquent on their taxes.  They’re demanding that the rest of us pick up the slack.  Because that $1.5 billion tax hike they slapped us with last year wasn’t enough.

Senate and House Republicans got together after the Democrats passed this cleverly disguised monstrosity and began pushing, again, the GOP Senate Economic Stimulus Plan and the House Homeowner Relief proposals.

“Today’s Democrat property tax increase is a blatant attack on Michigan families who are working hard and struggling to pay their bills on time,” House Republican Leader Craig DeRoche told reporters.   (Interestingly, I haven’t found anyone who’s bothered to report on the GOP response this morning.)  “This is yet another example of inefficient, ineffective government, and it is time for change. The Legislature should be held accountable to the taxpayers, and in times of great strife, real reform is necessary.”

The Senate Republican Economic Stimulus offers immediate relief to home buyers and jumpstarts Michigan’s sluggish housing market by increasing the Homestead Property Tax Credit from $1,200 to $1,300; provides substantial income tax relief for individuals; and gives relief to families having problems selling a home in the current market.  The plan passed the Republican-led Senate in March and awaits action in the House.

The House Republican Homeowner Relief plan stops property tax increases if a home’s value decreases; makes it easier to appeal a property assessment; and ensures that assessments reflect reality by requiring that the calculations used to determine property values be based on more current data and include foreclosures.

None of the proposals spread liability or increase taxes on Peter while cutting them on Paul.  Which means none of the proposals will likely ever get a sniff of the House floor so long as Andy Dillon, Steve Tobocman, Robert Dean and their tax-hike caucus run the show.

So what are we going to do about it?

We can either get behind our House candidates this fall and do everything we possibly can to help Dan Tietema in Grand Rapids, Holly Hughes in Muskegon, Ray Snell in Jackson and the rest of the team… or we can scribble another big check to the Democrats in Lansing.  Choice is ours.

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