Surprise! Tax Cuts Won’t Grow The Economy

On the heels of Governor Rick Snyder’s State Of The State address this past Thursday, where he played coy over what he intended to do with Michigan’s estimated $970 million surplus over the next three years, a new report shows that tax cuts, especially in Michigan, won’t grow the economy.

  • The Congressional Research Service studied 65 years of federal tax and economic data and concluded that top income tax rates have had no discernible impact on economic growth.4
  • Studies of the impact of state personal income tax levels on economic growth are particularly likely to find no economic benefit from lower taxes.

Supporters of a personal income tax cut try to justify it as a way to help low- and moderate-income families who were negatively affected by the tax shift of 2011, which cut business taxes by 83% and increased taxes on many low-income workers and retirees, including a 70% cut in the Earned Income Tax Credit for low-wage workers.

In fact, most of the benefits of a cut in the state’s personal income tax from its current level of 4.25% to 3.9% would flow to Michigan’s wealthiest taxpayers, at a time when inequality and poverty are already high.

Oh, what to do, what to do?

“Let’s be smart about it,” Governor Snyder said. “I believe there is going to be some opportunity for tax relief. And when I talk about tax relief, the people that come to mind are those hardworking Michiganders who wake up every day and pack their lunch to go to work.”

clap clap clap.gif

From Public News Service

Karen Holcomb-Merrill, policy director, Michigan League for Public Policy, said across-the-board tax cuts only serve to drain resources from the very programs and services that fuel economic growth.

“A good education system, good strong communities and public safety, good roads and good bridges- that’s what we need to grow our economy here in Michigan, not income tax cuts,” Holcomb-Merrill said.”

So, expect more tax cuts for those hard-working Americans in Michigan’s millionaire-tax-bracket paid for on the backs of teachers, students, crumbling infrastructure and pensioners.

Because nothing says “fiscal responsibility” like concentrated wealth.

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  • http://www.politicalruminations.com/ nicole

    That bastard accumulated those monies by soaking the working poor and senior citizens (retirees).
    And you’re right. He’ll give the money to his friends.

    Fucking wussy prick!

    Chances are good (barring the emo-baggers sitting out the vote) that he’ll lose this election.

  • Axomamma

    It’s only a budget surplus if you refuse to restore cuts or increase budgets for education and other social programs and/or infrastructure projects.

  • muselet

    “Let’s be smart about it,” Governor Snyder said, before being jaw-droppingly stupid about it.

    That tax cuts boost the economy is an article of faith for Rs. Indeed, it’s the first tenet of the Republican catechism and is ferociously defended by the True Believers (and, at least in public, they’re all True Believers). It’s hooey—our three-decades–long national experiement in R economic policy has proved that beyond any reasonable doubt—and the brighter Rs know it’s hooey, but they continue to sell the snake oil.

    Karen Holcomb-Merrill, policy director, Michigan League for Public Policy, said across-the-board tax cuts only serve to drain resources from the very programs and services that fuel economic growth.

    Which is actually why the Rs like tax cuts so much. They’re sadistic as well as economic illiterates.

    –alopecia

  • D_C_Wilson

    The only thing missing from that animated gif is this:

    https://www.youtube.com/watch?v=ZnHmskwqCCQ

    • muselet

      It works depressingly well.

      –alopecia

  • http://drangedinaz.wordpress.com/ IrishGrrrl

    65 years of data and they still refuse to acknowledge the reality that tax cuts don’t work.