Taxes Matter. Government Matters.
Governor Rick Snyder was inaugurated on January 1, 2010. Coming from big business and venture capital, he only took six weeks in office to propose a radical redistribution of the state's shrinking tax base. Snyder's budget completely gutted the state's complex business tax, replacing it with a significantly lower flat tax on corporations. This $1.7 billion loss of tax income was partially replaced by $1.5 billion in raised taxes on individuals. He specifically created a new tax on pension-related income, keeping a flat income tax rate of 4.25% (instead of the 3.9% rate it was supposed to drop to), and watering down the benefit of the Earned Income Tax Credit (EITC). To add insult to injury (literally), the Governor called this massive shift in tax burden from business to individuals "shared sacrifice."
Governor Snyder is not alone in his governing strategies. In fact, at the Federal level, the difference in tax burden as a percentage of revenue between business and individuals hasn't been as high since the trickle-down era of the Reaganomics.
But Governor Snyder didn't stop there.
On March 16, 2011, Snyder signed a controversial bill into law that gave powers to appointed emergency managers in cities on the brink of bankruptcy, effectively creating management by fiat. The bill was repealed by voter initiative in November 2012. However, weeks later in December 2012 Snyder signed a revised version of the bill back into law.
On December 22, 2011, Snyder signed into law The Public Employee Domestic Partner Benefit Restriction Act, which prevents the same-sex domestic partners of public employees at both the state and local level from receiving health benefits.
On the morning of December 6, 2012, during a lame duck session of the Republican-controlled Michigan legislature, Snyder called a joint press conference with the legislative leadership to announce fast-track right-to-work legislation. The legislation passed both houses of the Michigan legislature quickly without committee votes or public hearings. A $1 million appropriation added to the legislation made it ineligible for repeal via referendum.
Governor Snyder is not an outlier. Many governors around the country have pushed radical agendas that tarnish the role of government. And they're doing much of it using "economic growth" as the reason.
This is why taxes matter. This is why having real, meaningful conversations about the economy matters. We know that it is easier to do things when people "don't understand" how the economy works. The truth is that we all understand how economics works, because we all navigate the economy each day. And what is the point of the economy, and the point of government, if not to make the lives of people better?