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Posted on Sat, Feb 26, 2011 : 5:11 p.m.

Where's the 'shared sacrifice' for the wealthy in Gov. Snyder's economic plan?

By Letters to the Editor

Governor Snyder's appeal to Michiganders to share economic sacrifice reminds me of Anatole France's comment that some politicians' notion of equality is to forbid both the rich and the poor "to sleep under bridges, to beg in the streets and to steal bread."

Snyder's approach to sacrifice would have the very rich give up some small measure of luxuries they enjoy, thanks to a great transfer of wealth into their hands over the past 30 years, while most middle-class and poor people face a crunch affecting housing, health care, education and food.

John N. Woodford Ann Arbor

Comments

Dennis

Mon, Feb 28, 2011 : 2 p.m.

You need only to look to Ford, GM, and Chrysler to see that huge profits do not equate jobs. After receiving tax incentives from the State of Michigan, after huge concessions from their unionized workers. The only jobs that were created were outside our State and outside of our Country. Now Gov. Snyder wants to reduce taxes on corporations again. Why? We have seen from history that trickle down does not work. If it did we would have plenty of high paying jobs instead of minimum wage jobs and the Michigan Economy would not be in the tank. It always amazes me when our leaders want to take more from the middle class to give to the corporations....after all if they (corporations) did invest in our State and paid a living wage we wouldn't even have to discuss this. Is it a coincidence that after receiving loans from the Federal Government and MORE tax incentives that these corporations are again making huge profits or is it creative bookkeeping?

AnnArBo

Mon, Feb 28, 2011 : 12:40 a.m.

The real problem is that we have such a bloated buracracy that private sector money is being sucked up and not available for the private sector to great jobs and true prosperity. We elected a guy who ran on "Change you can believe in" and now we have class warfare, blaming each other because we don't have what we want, and demonizing others who have worked hard to get what they have. Thank goodness a few govenors now have the guts to step up and at least try to end the madness and show that real change is needed.

Jay Thomas

Sun, Feb 27, 2011 : 7:26 p.m.

Taxing pensions is a good way to start for some shared sacrifice. No reason the average person's retirement should be taxed while politically connected unions are exempted. Now if we can only get rid of the public sector unions defined benefit plans (where the taxpayer has to pick up the tab if their investments don't work out). Most folks living in the real world don't have those kind of guarantees.;)

sh1

Sun, Feb 27, 2011 : 4:47 p.m.

@braggslaw, the reason the top 1/4 pay the most in taxes is because they are proportionally representing the wealth of this country. With a diminishing middle class, you're either at the top or bottom. And the top is rich beyond many of our imaginations.

Townie

Sun, Feb 27, 2011 : 3:10 p.m.

AEM: 'Are you telling me poor people spend more money on food, entertainment, and other life luxuries than the "rich"? Yes. Think about it. The poor / middle class now do spend a LOT more on food, less on 'entertainment' -- the number of poor / middle class people way exceeds those single number %s of people you're talking about so your logic makes no sense. The 400 richest Americans have more wealth than 155 million people combined. BUT they don't eat more than 155 million and don't buy appliances, cars, etc. as 155 million either. The rich might buy nice toys, etc. but they don't make up for hundreds of millions of people who can't buy. The share of income going to the wealthiest 1 percent of Americans, which was less than 10 percent in the early '70s, reached 23.5 percent in 2007 - the highest level on record save for 1928. And yet we keep hearing that if we just give wealthy people more money they'll create jobs, but it continues not to happen. Now the new mantra is give corporations more money and they'll create jobs. Hasn't happened and won't - US corporations are sitting on huge amounts of cash and aren't spending it. They are keeping payrolls tight and not giving anyone raises and know (and like) the labor market the way it is -- no jobs so no one can complain or leave their job.

AEM

Sun, Feb 27, 2011 : 9:30 p.m.

@johnq: I actually don't consider someone making $150k a year to be rich. While they are indeed better off than most, there are a lot of people earning more money. I also don't know what makes you think that I think I'm better than anyone. I didn't even begin to hint at anything like that. I simply believe that whatever amount of money someone earns, that it's their money to do with it what they please. Why should you or any politician decide what to do with it? Enough with the class warfare. That type of fear mongering will get us nowhere.

John Q

Sun, Feb 27, 2011 : 6:10 p.m.

"You can continue on about the 400 richest Americans, but you fail to recognize those other so-called "rich" people making $150,000 whose earnings often come from their own small businesses." At least you acknowledge if you're making $150,000 a year, you're rich. Yes, look at the numbers. People making $150,000 are doing far better than the vast majority of Americans. Too bad you look down on your fellow Americans and think of yourself as better than them.

AEM

Sun, Feb 27, 2011 : 4:02 p.m.

You can continue on about the 400 richest Americans, but you fail to recognize those other so-called "rich" people making $150,000 whose earnings often come from their own small businesses. Those are the current and potential job creators targeted in the changing tax structure in Michigan. With your obvious dislike of corporations you should be excited that Snyder is actually increasing their tax burden.

Margaret Welch

Sun, Feb 27, 2011 : 1:20 p.m.

Shepard145: If what you are preaching was true than Columbia would be a paradise to live in! What a bunch of nonsense that the rich invest and therefore create jobs. Rich people put their money into banks oftentimes.....that are now holding huge amounts of money and not lending to get the economy going? Trickle down economics does not work! Give me some proof that investing in Exon creates a bunch of jobs and not just millions in profit for the company that they give in bonuses to their top brass. Your guy....Snyder....even went so far as to cut the tax break for the movie industry coming to this State. How stupid! We'll see, Mr. Shepard just how well our economy does BECAUSE of the policies established by Mr. Snyder. I do wish him well.....but he had better be very careful.

braggslaw

Sun, Feb 27, 2011 : 12:09 p.m.

Let's be crystal clear on this issue The top 25% of the population pay 86% of the federal taxes. A small minority are carrying the water for the super-majority. Federal taxes subsidize states and bankroll many state services. (like filling in last year's budget gaps) FICA and State income tax are flat rates. Successfull skilled people can also move, which is what is happening in this state. If the issue is jobs, taxing corporations and high earners will simply drive jobs to lower cost states.

John Q

Sun, Feb 27, 2011 : 6:11 p.m.

"The top 25% of the population pay 86% of the federal taxes. A small minority are carrying the water for the super-majority." False. They pay a share of the federal income taxes. Not payroll taxes or Medicare or state income taxes or state property taxes or sales tax or gas tax, etc. If you're going to constantly repeat your Rush Limbaugh talking point, try getting the basic facts correct.

johnnya2

Sun, Feb 27, 2011 : 1:47 p.m.

The top 400 earners make equal to what the bottom 50% make. Why shouldnt the top half pay more? They get more. Most of those people did not WORK for their share, they won the genetic lottery. If you think tax breaks for William Clay Ford and Bill Ford Jr are good because they EARNED their positions, you really are living in a fantasy world

Heardoc

Sun, Feb 27, 2011 : 6:49 a.m.

The stats for taxation appear to show that the 'wealthy' pay the vast majority of the taxes. In fact, there is a large group of people that pay no income taxes in this state -- and as that number grows -- and if that becomes the majority then tax increases will know no bounds. Look -- if there is a large percentage -- i believe it is in the 30% range now-- that do not pay taxes then they have nothing to lose and all to gain when tax increases come up. This will foster even greater waste and misspending and a permanent group of people who see no need to work as all is given to them by the government. The shared sacrifice should be spread to as many people as possible -- even if that means collecting as low as $1 dollar from even the poorest. This is so that everyone has "skin" in the game (leftist Obama (not born in america)quote). Not making each and every american responsible in some small manner is really stupid -- that is where the Shared Sacrifice should start.

John Q

Sun, Feb 27, 2011 : 9:15 a.m.

95% of Michigan's seniors don't pay State income taxes. Those must be the people you're so eager to stick with new taxes so that they can feel the shared sacrifice and have some skin in the game. As to your made up number about the people who don't pay any income taxes. If you're talking about federal income taxes, the top 10 states of non-payers is made up almost exclusively of Republican-leaning southern states. The states that have the lowest percentage of non-payers? Almost exclusively blue states on the east and west coasts. Yet one more example of how the freeloading conservative red states are sucking away federal tax dollars from the people who actually pay.

John Q

Sun, Feb 27, 2011 : 9:03 a.m.

"The stats for taxation appear to show that the 'wealthy' pay the vast majority of the taxes." Since the wealthy control the vast majority of income, one would hope that they might pay something close to their share in taxes. "In fact, there is a large group of people that pay no income taxes in this state -- and as that number grows -- and if that becomes the majority then tax increases will know no bounds." Who might those people be? Who pays no income taxes? Right now, that would be people with public and private pensions, people who can shelter their income from state taxes, senior citizens at the lower income levels. The poor? Only if you're really poor. Otherwise, if you're employed in this state, you're paying state income taxes. Of course, this is a handy fake talking points among the Tea Party crowd as if the only takes people pay are income taxes or that income taxes even account for the majority of state revenue. "This will foster even greater waste and misspending and a permanent group of people who see no need to work as all is given to them by the government." You know these people who don't work and get everything given to them by the government? Sounds like a pretty sweet deal. I'm sure that's such a great life people are rushing to go live on the government dole. "The shared sacrifice should be spread to as many people as possible -- even if that means collecting as low as $1 dollar from even the poorest. " From what I've seen, plenty of people are sharing the sacrifice already - high unemployment (except for the rich), declining wages (except for the rich), the prospect of paying more taxes (except for the rich) .... now wait, when does the shared sacrifice part kick in for the rich people?

AEM

Sun, Feb 27, 2011 : 5:23 a.m.

Townie and many others just don't seem to understand it. Many people making $250k are those who create jobs. Say Bob owns his own business, an S Corp with 25 employees (which is the case of my family business), and said business earns over $250k. Under Gov. Granholm, Bob's personal income would have been taxed along with the Michigan Business Tax. That means Bob would have been taxed twice, not to mention countless Federal taxes. If Bob risks his financial life in his business and chooses to employ those 25 people, why should he be penalized more than others? Bob not only risks his financial well-being, but also the livelihood and financial well-being of his employees everyday. But for some reason you still think Bob should pay more than five times more in State taxes than someone who is happy making $15 an hour. And let's be clear, most people making $15 an hour are making that amount due to their own life-choices. Only a small amount of those people are in that situation because of their mental health, physical disorders, etc. And to say that the "rich" don't spend more than the "poor" is asinine. Someone making $250k per year is undoubtedly able to invest in the stock market, but they also spend more in upkeep of their homes, more on food, going to the movies, traveling to the Henry Ford Museum (which includes fuel costs, possibly a hotel stay, food, etc.)...all of which contributes to the wages of the middle-class. Without the "rich" how would the middle-class museum workers earn a living? Are you telling me poor people spend more money on food, entertainment, and other life luxuries than the "rich"? Our system, the greatest the world has ever known, relies on classes. But the main thing that differentiates us from other nations is that the poor can work their way up to become rich with hard work, risk and sacrifice. Government intervention doesn't create those possibilities; government intervention only stand

John Q

Sun, Feb 27, 2011 : 8:51 a.m.

Even when the system is set up to your benefit, you whine about it. Under Snyder's plan, S Corps and similar entities will pay at a lower tax rate than businesses subject to the new corporate income tax. Your claim that someone would be expected to pay "five times more in State taxes" than someone making $15 an hour is false. As for your your pompous declarations about how the rest of us exist only because of the benevolent largess of the rich, here's a news flash. People making a lot less than you do spend a lot more of their income on the things that keep most people employed. You can keep kidding yourself that it's the fat cats that keep the world's economy moving. Keep using that as your excuse to manipulate the tax system to your benefit and at the expense of those who have the least. Maybe you can fool yourself into being able to sleep at night.

AEM

Sun, Feb 27, 2011 : 5:26 a.m.

Government intervention doesn't create those possibilities; government intervention only stands in the way of those possibilities.

John Q

Sun, Feb 27, 2011 : 5:02 a.m.

"His 6% business income tax isn't cheap but compliance is a no-brainer." Not cheap? It's pretty cheap for the thousands of businesses who won't even have to pay for it. For the rest, almost all of them are getting a tax break. Why do you think he's taxing grandparents and the poor to make up for the lost revenue? It's not because those businesses are paying more or even the same that he has to do that.

Technojunkie

Sun, Feb 27, 2011 : 3:35 a.m.

The wealthy can, and do, leave states where the electorate has decided to solve budget problems by taxing the bejeezus out of them. Ask the Peoples' States of California and New York. Besides, the tax code is not the primary means of how the working man is getting shafted. It's the reckless money printing by the Federal Reserve, which monetizes and enables the $1.5T+ per year federal deficits that are destroying the value of the dollar, the newly printed money gets funneled to the banksters (Goldman Sachs, etc) and politically connected big businesses (tarted up as "green jobs" and such), and the resulting inflation caused by that money printing impoverishes everyone who isn't receiving the newly printed currency. The gold standard kept such lunacy in check but it's long gone now. Think about this: a 1964 half dollar, one of the last made of 90% silver, is now worth $12 in today's inflated currency. The 1964 minimum wage was $1.25. Starting to see why one salary generally can't support a family today despite the productivity increases of the past half century? Starting to see what Ron Paul is going crazy about? But that's a federal government problem. Gov. Snyder has the right idea with what he can do: simplify the tax code, get spending down within our means to pay it, less economic grandstanding with lunacy like the film subsidy and more simplifying life for home-grown businesses. His 6% business income tax isn't cheap but compliance is a no-brainer. There is no way out of our current mess that doesn't involve pain.

johnnya2

Sun, Feb 27, 2011 : 1:42 p.m.

Wrong. Why isnt every business in America in South Dakota (lowest state business taxes)? Yet Google and Apple toil away in the second highest tax state? Could it be that growing companies NEED an educated work force? That they want something more. IIn fact, the whole concept off a balanced budget is stupid. There are many times people spend more than they make. When times are bad, or when they lose a job temporarily, yet we put limits on the state to not be able to borrow to pay their bills and keep the economy going. The reason the state cant get out of the mess it is in is because of these stupid right wing ideas..

John Q

Sun, Feb 27, 2011 : 2:01 a.m.

"The days of the "receiving class" endlessly demanding more while paying or offering society little or nothing in return is coming to a big speed bump." That explains why Snyder left the property tax credit in the state tax code. What's the business case for that? It's simply a way to shift the burden of the income tax from those who own property onto those who do not. The "shepard145"'s of the world complain about the poor stealing from the rich. The truth is that the tax system contains plenty of gimmes for the well-to-do. I reviewed my federal income taxes from last year. My household had an AGI of around $113,000. But I only paid federal taxes on $80,000 of that. Why? Because the federal tax code is larded up with exemptions and credits that primarily benefit upper income individuals and households. Pay state income taxes? Deduct it. Paying a mortgage? Deduct the mortgage interest. Feeling charitable? Deduct the donation to your favorite non-profit. The state tax system is set up the same way except it isn't even moderately progressive which is supposed to be a feature of the federal tax code. All of those exemptions and credits primarily benefit those who have and do little for those living paycheck to paycheck. You can bet shepard145's tax return probably claimed all these and more. But does shepard145 complain about those gimmes? Nope, only those that benefit the poor.

bugjuice

Sun, Feb 27, 2011 : 12:37 a.m.

Trickle down economics is a myth. Fewer jobs were created under Bush after the tax cuts for the wealthiest than any president in modern history. No matter how many time it's repeated, still will not make it true.

Cash

Sun, Feb 27, 2011 : 12:25 a.m.

The biggest disparity in the examples — which all were constructed by the Treasury for the Governor's Office — is between a low-income working single parent who would see his or her taxes increase by $689, and most better-off working families. A family with more than five times the income of a single parent making $22,000 a year would see their taxes nudged up just $77.

Elizabeth

Sun, Feb 27, 2011 : 9:02 p.m.

High income: 663/.07/250000 = 3.8% taxes Upper-middle income: 77/.02/110000 = 3.5% taxes Low income: 689/.92/22000 = 3.4% taxes Retiree: 739/.62/(21000+13000) = 3.5% taxes That looks pretty even (and low) to me.

Cash

Sun, Feb 27, 2011 : 12:12 a.m.

High-income married couple with two children Income $250,000 — Earned income $4,500 in property tax Change: 7 percent tax increase

Cash

Sun, Feb 27, 2011 : 11:37 a.m.

$663

Elizabeth

Sun, Feb 27, 2011 : 2:29 a.m.

Could you include the amount of that tax increase? ie "7 percent tax increase of ______" . Thank you!

Cash

Sun, Feb 27, 2011 : 12:08 a.m.

Upper-middle-income married couple with three children Income $110,000 — Earned income | $1,500 — Other income | $3,500 in property taxes Change: 2 percent tax increase of $77 _____________________________________________________________________ Low-income single parent with two children Income $22,000 — Earned income from $11/hour job | $1,440 in property taxes Change: 92 percent tax increase of $689

AEM

Sun, Feb 27, 2011 : 3:54 p.m.

I hate to break it you you, Cash, but someone making $22,000 a year with two children isn't going to be paying $1,440 in property taxes.

Cash

Sun, Feb 27, 2011 : 12:04 a.m.

Example : $21,000 — Pension $13,400 — Social Security $4,000 in property taxes Loses $2,300 exemption, pays $740 more in taxLike all retirees, this taxpayer loses the senior exemption, which lowers his total personal exemptions from $5,900 to $3,600, adding $2,300 to his taxable income. And with the governor's proposal to tax pension income, this retiree's $21,000 pension is now subject to income tax. Change: 62 percent tax increase of $739

Townie

Sat, Feb 26, 2011 : 11:54 p.m.

shepard: I'm sorry to tell you that the rich don't spend the money we have been constantly giving them for the last 10 years on jobs. You are correct that they 'invest' it, but most of the time they park the extra money from tax cuts in real estate, in treasury bills and luxury goods. 80% of the new jobs are from small business and the rich we're talking about here aren't running small businesses (many have inherited their money). If this was such a great idea then please explain to me why there was so little job creation during the 8 years of tax cuts from the Bush administration. Every cut was heralded as job creation but in the end where were the jobs? The trickle down theory is a myth as is this. Clinton raised taxes and we had a strong economy so what happened there? Lot more job creation then than during the Bush years. I'm retired and on a fixed income and under Michigan Rick's wonderful play my taxes go up 336% while the $250k crowd's goes up 6%. Doesn't sound 'shared' to me. I didn't create this economic mess - the richest folks in the finance 'industry' did. Us poor folks are consumers and we can't spend any more so where are the customers for all these new jobs going to come from?

AnnArBo

Mon, Feb 28, 2011 : 12:29 a.m.

"The money WE have been constantly giving them"????

NoSUVforMe

Sun, Feb 27, 2011 : 12:31 p.m.

Townie, Spot on. There was NO JOB CREATION under Bush. The only result of Bush/Republican policies was slow growth with a vastly increasing amount of wealth in fewer and fewer hands while people with little or nothing ended up with NO JOBS, NO HOUSE, NO HEALTHCARE. And these people dare to call themselves Christians. Sick...

dotdash

Sat, Feb 26, 2011 : 11:23 p.m.

I really hope Governor Snyder can make a go of it. We all need him to. That said, shepard145 makes the classic Republican argument that we should give/keep the wealthy tax breaks because they invest the money. The classic Democratic argument is that we should give/keep the middle class tax breaks because they spend the money. Research shows that money that goes directly into the community when the middle class buys food and furniture and pays their bills does much more for the economy than the shares of Exxon Mobil that a wealthy person would purchase with the same money. I suppose reasonable people could disagree, but wouldn't you rather have healthy local merchants than a higher market cap for Exxon Mobil?

shepard145

Sat, Feb 26, 2011 : 11:08 p.m.

The class envy and economic double speak continue into 2011 without missing a beat. The days of the "receiving class" endlessly demanding more while paying or offering society little or nothing in return is coming to a big speed bump. This budget is not about rich and poor (economies do not grow from the unemployment line up regardless of what nitwit Pelosi claims), but attracting business to Michigan, which helps EVERYONE. Sitting in your trailer wishing for Obama's formula of using higher taxes to punish "the rich" for their success and make you feel better helps NO ONE. The "rich" do not keep their wealth buried in the yard in a pirate chest. They I N V E S T it!! ..and investment does what? …generate economic activity that generates jobs! ..and in the process they make MORE MONEY. That market economy has allowed the US to enjoy unheard of prosperity, generating over 25% of the world's Gross Domestic Product in 2006 with 4.3% of the population. That is also the economy that Obama is trying to dismantle, but that lesson is for another show. We have ushered out an oddball leftist lawyer far over her intellectual head in Lansing and elected a brilliant business mind. This is it folks! Instead of more complaining, Michigan residents should realize that Governor Snyder is it. If someone of his talent can't improve Michigan's future, there is no plan B.

bugjuice

Sun, Feb 27, 2011 : 12:40 a.m.

Vacations to Italy, expensive foreign cars and diamond jewelry do next to nothing for the American economy. Where is Gateway computer today? And Snyder was the CEO?

bugjuice

Sun, Feb 27, 2011 : 12:34 a.m.

Let's see how this stacks up. In the previous administration, Bush and Republicans gave tax cuts to the wealthiest in our country. Job growth under Bush was the lowest of any president in modern times. And this from Fox News before the big recession <a href="http://www.foxnews.com/story/0,2933,242424,00.html" rel='nofollow'>http://www.foxnews.com/story/0,2933,242424,00.html</a> So much for the mythical &quot;trickle down&quot; theory of economics claiming that tax cuts stimulate jobs, that has been disproven more than once.

Cash

Sat, Feb 26, 2011 : 11:18 p.m.

Did you even READ the Detroit News article? Of course it's about taking from the least able to pay. Even the State Treasurer admits it in the accompanying article!

Cash

Sat, Feb 26, 2011 : 10:44 p.m.

Even the right-leaning Detroit News spelled out the grim picture for the poor and the elderly, in other words, the people who are least able to fight for themselves anymore. <a href="http://www.detnews.com/article/20110226/BIZ/102260340/How-Snyder-s-tax-plan-would-affect-8-sample-taxpayers" rel='nofollow'>http://www.detnews.com/article/20110226/BIZ/102260340/How-Snyder-s-tax-plan-would-affect-8-sample-taxpayers</a>