COMMENTARY

Attempt to eliminate Michigan taxes was a dumb idea

A bill proposed by Michigan Rep. Lee Chatfield would have slashed the state income tax until it disappeared, but offered no explanation of how to replace the the state planned to replace the lost revenue.

ASSOCIATED PRESS

LEVERING, Mich. — State Rep. Lee Chatfield (R., Levering), the author of a bill that would pretty much have destroyed Michigan government as we’ve known it, has lived nearly his entire life in this tiny community, the home of the Levering Café, a family-style restaurant with a huge plastic chicken in an Uncle Sam suit poised over the door.

His bill would have slashed the state income tax from 4.25 percent to 3.9 percent — and cut it by another 10th of a percent every year, till it disappeared entirely in 2057.

Lessenberry

That would have blown a $1.1 billion hole in the state’s general fund next year, a deficit that would continue to get steadily larger. Now, this may sound like one of the many silly bills introduced every year by various lawmakers, sometimes to appease their constituents. Such bills are sent to some committee and usually never heard from again.

But that wasn’t the case here. This bill had the full support of new Speaker of the House Tom Leonard (R., DeWitt), who proclaimed that “this is simply the right thing to do for Michigan’s families,” and would return “hundreds of millions of dollars back to the people who earned them.”

That bill narrowly failed, 52-55, in the wee hours Thursday morning, after a dozen Republicans refused to go along, largely because nobody was willing to say how the lost revenue would be made up, or what programs would be slashed.

Afterwards, an embarrassed Speaker Leonard lashed out against State Rep. Jason Sheppard, (R., Temperance) at 3 a.m. and stripped him of his chairmanship of the financial services committee, allegedly for lying about which way he would vote.

Few could remember anything like this before. But though the tax cut seemed dead for now, some hard-line conservatives vowed to try again. And they have powerful allies.

And though Gov. Rick Snyder has strong reservations, the tax-slashing bill was also backed by Michigan Attorney General Bill Schuette, who is running an all-but-announced campaign for the GOP nomination for governor next year.

However, no one was saying how the state could do this — and pay for schools, roads, and prisons, among all the other things modern government does.

A bill proposed by Michigan Rep. Lee Chatfield would have slashed the state income tax until it disappeared, but offered no explanation of how to replace the the state planned to replace the lost revenue.

Mr. Chatfield himself, who is just 28, may trust in the Lord to provide. He has spent his life in a nearly all-white, fundamentalist Christian world that differs markedly from most of the state. He did attend Northland International University, a short-lived and now-defunct Baptist college in northern Wisconsin, before returning home to teach, coach and be the athletic director at nearby Northern Michigan Christian Academy in Burt Lake, where he himself went to high school.

Back in his hometown, there are no black residents among the 215 residents of Levering, according to CityData.com; just two Hispanics and nine Native Americans.

Years ago, Mr. Chatfield, who was just elected to his second term, likely would have been a little-known back bencher. But thanks to term limits, no one can stay in the lower house nowadays longer than six years.

That means lawmakers can become instant, if fleeting, stars. Mr. Chatfield attracted notice even before he arrived when, in 2014, he defeated incumbent Republican State Rep. Frank Foster in a legislative primary.

He challenged him because the otherwise conservative Mr. Foster supported expanding Michigan’s Elliot-Larsen civil rights law to protect gays and lesbians.

The young teacher was also angry over Common Core education standards, and because Mr. Foster supported the expanded Medicaid coverage that made it possible for 600,000 formerly uncovered Michiganders to have health insurance.

Michigan’s August primary is historically known for tiny turnouts of mainly ideologically-driven voters, and enough of them showed up to give Mr. Chatfield the nomination, which virtually guaranteed election in this safe Republican seat.

Now, their representative is vowing to give state voters a tax break. But economic analysts say that if the tax is slashed from 4.25 to 3.9 percent, the average family will get very little.

Michigan has a flat, not a graduated tax rate, meaning that barmaids and billionaires pay the same percentage. Rachel Richards, the legislative coordinator for the non-partisan and nonprofit Michigan League for Public Policy, crunched the numbers, and came up with these figures:

The average Michigan household income is about $51,000, according to state statistics. (Levering is just slightly higher, at $52,580) Such a taxpayer would get a cut of about $82 a year, spread over all of his or her paycheck.

That would be virtually unnoticeable; $1.58 a week. Even as a lump sum, that wouldn’t pay for one college credit hour, or one pothole-destroyed tire.

The poorest taxpayers — those making less than $22,000 — would get annual savings averaging a mere $16. Taxpayers making $300,000 a year, on the other hand, would get $821.

Millionaires would get thousands back. 

State Senate Minority Leader Jim Ananich (D., Flint) doubts that anything like Mr. Chatfield’s drastic bill will ever become law. “I think the House knows the Senate probably wouldn’t do it, and the governor would veto it.”

He doesn’t rule out, however, some lesser tax cut. Cutting taxes is almost always a politically popular idea. But Michigan is a state that currently doesn’t have enough revenue to repair its crumbling roads and bridges or adequately fund other needs.

Lawmakers might want to take a hard look at what is going on now in solidly Republican Kansas. There, lawmakers slashed state income taxes in 2012 and 2013. But that failed as an economic stimulus and state services declined dramatically.

Now, both houses of their legislature have voted to once again increase state income taxes.

 “Taxes are what we pay for civilized society,” Supreme Court Justice Oliver Wendell Holmes Jr. once said in a famous dissenting opinion. He, too, was a Republican.

And most of the time, he was right.

Jack Lessenberry, a member of the journalism faculty at Wayne State University in Detroit and The Blade’s ombudsman, writes on issues and people in Michigan. Contact him at: omblade@aol.com.