SUPPORT FOR A MODEST BUSINESS TAX CUT
We found majority support for the concept of cutting business taxes to create a better climate for business and job growth. But, in both random statewide phone polling and instant polling with hand-held devices in Common Sense Conversations, there was much more support for a “modest” cut than the historic, “major” cut of $1.7 billion per enacted this month:
Also, among some 10,000 participants from February thru mid-May in The Center for Michigan’s “You Balance the Budget” simulation game, 47 percent endorsed Snyder’s plan to abolish the Michigan Business Tax in favor of a flat, 6-percent corporate income tax on some corporations.
During open discussion periods of Common Sense Conversations, supporters of business tax cuts were enthusiastic about the governor’s proposals.
“This business tax cut is overwhelmingly supported in the business community,” declared one participant. “Businesses don’t like uncertainty. Specific industry-targeted cuts are not fair. Businesses want to know what to expect. Corporations don’t pay taxes – we pay. And it is certain that cutting business taxes will generate jobs.”
“We’re in a worldwide competition and no longer have a monopoly in automobile manufacturing,” added another participant. “Make sure we have a competitive tax structure to lure business to complete.”
But critics of business tax cuts were more vocal than supporters during open discussion periods of Common Sense Conversations. Those critics raised a host of concerns, including a transfer of wealth from poor to rich and funding business tax cuts through disinvestment in education and local government services.
One participant summarized: “Everyone wants to say ‘cut taxes, we’re paying too much.’ But we’re not the most-taxed state and cutting business taxes doesn’t guarantee more jobs.”
It is clear from those Common Sense Conversations that Michigan residents intend to hold Snyder to his accountant’s philosophy of dashboards, metrics, and measuring progress. There is considerable public circumspection on whether new business tax cuts will clearly lead to economic growth and job growth.
SPLIT OPINION ON PENSION TAXES
One of Gov. Snyder’s most controversial – and unexpected – proposals in his first few months is a tax on pension income. The governor argues it is an issue of fairness: pensions are income and should be taxed like any other form of individual income and Michigan is one of only a handful of states without a robust tax on pensions.
The public’s response to pension taxes is lukewarm, at best.
In random, statewide polling, respondents favored the concept of pension taxes by a 50-44 margin, with 6 percent undecided. But they were most favorable if the new tax came with significant exemptions to favor low- to moderate-income pensioners:
Should Michigan tax pensions?
In Common Sense Conversations, respondents voted against the general notion of pension taxes in Michigan:
Should Michigan tax pensions?
The Center for Michigan’s interactive online budget-balancing game offered nearly two dozen options to either cut spending or raise additional revenue. Through early May, one-third of budget game entries adopted the governor’s pension tax plan first outlined in his February budget address.
Numerous Common Sense Conversation participants opposed to pension taxes argued that pensioners and soon-to-be pensioners planned for retirement under the assurance they would not pay taxes on pensions.
“Now that they’re being taxed they feel tricked,” one participant said.
Others agreed with the governor’s fairness notion.
“I’m a senior and I agree to taxing pensions,” one said. “Now there is a trend away from defined-benefit plans. If you have a 401(k), you’re taxed anyway.”
Still more said they would be more supportive of pension taxes if they were convinced the revenues would be invested in public services: “I’d be happy to pay a tax on my pension if it goes to the poor and people who are at the bottom instead of businesses. That’s where I want my money to go. We need a firm foundation.”
OTHER TAX OPTIONS
Neither business taxes nor pension taxes drew the highest interest among Michigan residents who participated in The Center for Michigan’s public engagement activities so far this year.
When asked which type of tax they would most like to cut, poll respondents most favored property taxes while Common Sense Conversation participants favored income taxes by a narrow margin:
What is your top priority for a tax cut?
When asked which type of tax they would be most in favor of raising, both poll respondents and conversation participants picked, by wide margins, “sin taxes” on tobacco and alcohol:
What is your top priority for a tax increase?
Likewise, raising alcohol taxes was the clear favorite among the nearly two dozen strategic choices in the Center’s online budget balancing game. Sixty percent of budget game entries included raising the beer tax from 2 cents to 6 cents per bottle – which would raise $106 million in new tax revenues.
3 Comments
Before you read much into your results … I bet that your “Common Sense Conversations” groups are heavily skewed towards retirees and in particularly those with pensions (former government workers). Who else has time for this kind of thing?
As far as the number of jobs that Governor Snyder’s tax business cuts will or won’t produce … only ignorant Governmental types think that any such formula exists. But what we can certainly say, is what has not worked for Michigan over the last decade and a half. The Single Business Tax, Michigan Business Tax and Michigan’s general regulatory and labor environment have been devastating to Michigan’s ability to develop, diversify and attract businesses beyond it’s automotive base.
True, Michigan doesn’t have the highest tax burden in the country or mid-west, but when you’re sitting in the economic basement, saying “we’re just as bad as the next place” isn’t going to do much either. We need an economic game changer. Governor Snyder is giving us one.
We’re missing an opportunity to consider some important reforms: a graduated income tax and a sales tax on sevices. Taxing pensions would be more palatable if it were based on abiltity to pay, a graduated income tax would do that.
The majority of our purchases now are not for goods but for services which are exempt from the sales tax . This will increase in the future and it undercuts the base of the sales tax.
Changes in these could allow increased revenue or could be revenue neutral.
We already have a graduated income tax on the federal level, and it’s readily apparent how that has worked out.
More and more people on the public dole are clamoring for higher taxes, while simultaneously enjoying NOT paying any taxes whatsoever.
And just how long do you think THAT system will last?