Detroit Today host Stephen Henderson talks with former Director of the Michigan House Fiscal Agency Mitch Bean and Detroit Free Press Columnist Nancy Kaffer about Michigan’s 2011 business tax cuts, and if those policies should change.
They discuss the effects of tax cuts, how job growth and taxes are linked, and what meaningful economic growth would look like.
- How much does state government affect the economy?: Both Bean and Kaffer agree that the state government has limited power to affect job growth. They say that there are too many factors that affect the economy and that politicians from all sides will take credit—and deflect blame—regardless of how effective they have actually been.
- Individuals bearing more taxes: Bean says that we have seen the most drastic tax shift in state history. He says that lower business taxes and cuts to refunds and credits for individuals and families—such as Earned Income Tax Credit—mean that the elderly, families, and the working poor are shouldering more of Michigan’s taxes than before.
- Types of jobs: Kaffer and some callers point out that the quality of job growth is important. They believe that growing the number of minimum wage jobs that offer little opportunity for economic mobility is deceptive, and would like to see a higher quality of job growth. Most of the callers do not support the business tax cuts, and do not feel that they stimulate quality job growth.
- Tax base: Bean argues that infrastructure, regulations, education, public safety, a social safety net, and a variety of other factors are key to a successful modern capitalist economy. He says that the state provides these services, either directly or by contracting. The state must have money to make these types of investments, so tax base and where that money comes from are important for business.
Click the audio link above to hear the full conversation.