via Dawn Lancaster: When something is good, it doesnt need expensive marketing campaigns. So why are we inundated with TV, Radio, Newspaper and mailings touting the wonders of Proposal 1? Dont suppress your intuition... One of the best discussions I have found is actually in the COMMENTS FOLLOWING THE Beckmann article below.... in particular, the one by Tom OBrien, and he includes points that I have not seen elsewhere: Prop 1: I smell a rat... For average taxpayers warning sirens should sound whenever were told how large a consensus there is among establishment interests for any reform. If business and labor, conservatives and liberals, editorial pages and television punditry are joining hands in a Kumbaya chorus, its very likely time to duck and cover. The plain fact is that the word bipartisan means, and only ever applies to, a proposal upon which politicians -- regardless of stripe -- all agree. Further, experience shows that use of the term revenue-neutral ought to be even more alarming. When that phrase is being bandied about average taxpayers would be well-advised to hide their wallets. Its not surprising that even proponents cant explain the Prop 1 plan to get rid of (or reduce) the onerous, job-killing, and deceptively-named Personal Property Tax on equipment and machinery (or some of it) owned by businesses (or some of them.) The only thing that can be clearly stated about Prop 1 is that everything about it is unclear. The reason the proposal is so convoluted, the ballot description so woefully inadequate (What useful information can voters deduce, for instance, from the claim that passage will Create jobs?) and incomplete is the fact that the proposal is just 1/10th of whole. The overwhelming bulk of the reform is comprised of nine pieces of legislation already enacted. The only component that appears on the ballot is the request for voters to approve a concomitant, new Community Stabilization Authority to allocate tax revenue, a change that can only be made by the electorate. (Thank you, again, Dick Headlee -- and God rest your heroic soul for leaving Michigan taxpayers the legacy of this constitutional protection!) But upon this last piece of the PPT reform hangs the fate of the entire, Rube Goldberg contraption. It is important to note, incidentally, that eliminating this pernicious, eternally-penalizing tax that puts the business climate of our state at a competitive disadvantage vis-a-vis her sisters is long overdue. It is also laudable that this is a proposal to do so without leaving local government -- the one that provides all the services we actually use in our daily lives -- to absorb the cost. The worthiness of the goal notwithstanding, the Prop 1 approach of putatively replacing the PPT revenue that would be lost to local government with a portion of the states 6% Use Tax (corollary of the Sales Tax on products that are either leased or purchased out-of-state) is more than a little suspicious. The vagueries of Prop 1 not only attend the extent and application of tax cuts, but also the source of the approximately half-billion dollars that will be required to provide the local compensation. The source, that is, of the funds, not the particular revenue stream from which these are to be drawn. That is explicitly specified as the state Use Tax. Since budgeting (as everyone but our money-conjuring, federal government understands) is a zero-sum proposition, it is a safe bet that whatever interests currently lay claim to that half-billion dollar share of Use Tax revenue will not be standing idly by as it is redirected. Now, with a state budget of more than $50 billion per year why, one might wonder, specify that an expenditure of a mere 1% of the total be drawn specifically -- and exclusively -- from this one revenue source? I will hazard a guess. I suspect the reason for earmarking a portion of the Use Tax -- and only the Use Tax -- as the designated revenue source is to set the stage for eventually revisiting the effort to impose some form of legally enforceable compliance with this tax on internet purchases. The fact that a substantial number of Michiganders have been making purchases on the web without giving the state its 6% piece of the action has been giving politicians the vapors going all the way back to Gov. Engler. The Prop 1 approach to PPT reform will allow that crusade to not only be resurrected, but redoubled. When the newly created tax redistribution authority comes up short of the funds needed to make local governments whole it will provide a marvelous recruiting opportunity for the state government to enlist a host of new and highly motivated allies in their holy quest to wring tribute from Internet purchases. Additionally, restricting the revenue source to the Use Tax will allow politicians to claim to have kept their promise that there would be no tax increase as, they will hasten to point out, the new revenue is merely coming from an existing tax that has previously gone uncollected. (Disingenuous at best -- the tax rate imposed on Michiganders may not increase, but certainly the tax burden will... by an average of $50 per person!) Of course, even if I were familiar with every jot and tittle of this 10-bill package of reform (though it appears Im far from alone on that), this is all just speculation. But I must say Im having the same unpleasant experience once so colorfully described by Patrick Henry. To me there is an odiferous whiff of rodent in the air around Prop 1. detroitnews/article/20140801/OPINION01/308010005
Posted on: Sat, 02 Aug 2014 12:57:10 +0000
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