Column: Real cost of an income tax cut
Michigan legislators started the year with a call to reduce and ultimately repeal the state income tax.
But this idea is not about what Michigan has to give — it’s about what Michigan and residents like you have to lose.
The answer: too much. Cutting the income tax will cost us everything we depend on for our quality of life in Michigan: safe neighborhoods, exceptional schools, good health, reliable roads, clean air and water and so much more. These proposals will cost our state up to $9 billion a year in public investment.
We all like the sound of more money in our pockets, but not at that expense. We simply can’t afford to jeopardize our future.
Our economy is stable, but it is far from robust. We are absolutely in no position to experiment. These plans are long on promises, but overlook history. Indiana, Oklahoma and Kansas bought into similar tax cuts — and are all feeling buyer’s remorse.
Their experiences show that the proposed tax cuts will wreak havoc on our state without creating jobs or growing our economy.
We should learn from these mistakes instead of repeating them. Four years ago, Kansas legislators cut their state income tax. While many initially celebrated, it wasn’t long before the state’s fiscal foundation came crashing down.
Following the tax cut, Kansas suffered below average job growth, economic stagnation and a perpetual budget crisis.
Facing consecutive years of budget cuts, some Kansas schools had to end the academic year early because they literally did not have enough money to stay open.
The decimation of their roads fund meant that Kansas went from a schedule of repairing their highways every nine years to only making repairs every 50 years.
Just Googling “Kansas” finds three entries on the first page about their budget woes and failed income tax cut. Is that what Michigan wants to replicate — to make our state synonymous with economic problems (like it has with public health issues)?
Kansas was only a few dollars away from complete disaster and legislators were forced to act. In 2015, they passed the largest tax increase in Kansas history to plug holes created by the income tax cut.
Kansas taxpayers will have the highest taxes in state history, with working families bearing the brunt of it.
We can’t follow in Kansas’ footsteps if we want to be a vibrant and successful state. Michigan’s budget and economy are just starting to recover, and cutting the income tax will undo all of that progress.
We are fighting for the people of Michigan every day, especially the ones who are struggling the most. But cutting the income tax is not the answer.
While Michigan workers will pay slightly less in taxes, you will simply pay more for everything else.
Here’s what your tax cut will really go toward: fixing your car’s alignment after you hit a big pothole because our state won’t have the money to repair our roads; higher college tuition for your kids as universities cope with budget cuts; replacing your charred garage because the fire department was shorthanded and arrived too late; paying for your children to participate in school sports and extracurriculars because the schools can no longer fund them; and increased medical costs caused by budget cuts that will jeopardize our health, our environment, our food and our infrastructure.
The list could go on.
There is a big difference between small government and bad government, and the simple fact of the matter is that cutting the income tax will hurt our people, our economy and our state far more than it will help them.
Gilda Z. Jacobs is the president and CEO of the Michigan League for Public Policy.