GOP nominee's corporate tax giveaway could hurt Michigan families
Corporate tax breaks have already shifted the tax burden to Michigan families, and David Wolkinson’s plan could make it even worse.
Republican nominee David Wolkinson is taking a page straight from the national Republican playbook: multi-million dollar tax breaks for corporations.
Wolkinson is running for an open seat in the Michigan House of Representatives on a radical plan: completely eliminate all business taxes in Michigan. His plan would eliminate almost $700 million in state revenue — money that could go to fund education initiatives and infrastructure projects like filling in potholes.
But Wolkinson wants to line the pockets of corporate executives while shifting the tax burden to hardworking families.
Recent data shows that when Republicans in Michigan lavish corporations with tax giveaways, residents pick up the burden.
From 2011 through 2016, Gov. Snyder helped cut corporate taxes by more than $2 billion, according to an analysis by the Center for Michigan’s Bridge Magazine.
“The result is that Michigan now relies more heavily on individual taxes from residents,” reports Bridge. “Nearly 70 percent of the revenue in the general fund budget this year comes from income taxes, up from 54.6 percent in the 2012 fiscal year.”
Wolkinson’s plan would not just reduce corporate taxes, but eliminate them altogether.
And Wolkinson makes the unsubstantiated claim that eliminating taxes would somehow generate revenue for Michigan. “Eliminating Michigan’s corporate income tax would be a revenue-enhancing step toward job-creation and economic growth,” he says on his campaign website.
Yet the Bridge analysis of Snyder’s tax breaks show the exact opposite impact: a reduction in state revenue.
When adjusted for inflation, Michigan collected 5 percent less in overall taxes in 2016 than it did in 2008, during the Great Recession, according to a Bridge analysis of state data. That equates to more than $1.6 billion in lost revenue.
And the entirety of Wolkinson’s plan to deal with almost $700 million less in state revenue comes down to the power of believing.
“I believe that we can cut an additional $688 million” from the state budget, Wolkinson declares on his campaign website. While very specific about who will have all their taxes eliminated (corporations), Wolkinson refuses to go into any detail about what state services will be cut.
Michiganders may have to do without the $330 million dedicated to improving roads around the state. Perhaps Wolkinson will try to cut the $58 million dedicated to school safety in the 2019 budget.
Without any specificity, other than Wolkinson’s “belief,” there is no plan of how to deal with the loss of more than half a billion dollars from the state coffers.
But the lesson from history is clear: The additional tax burden will fall on working-class families throughout the state.
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