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Finley: Whitmer loses road allies with small biz tax

Nolan Finley
The Detroit News
The request Gov. Gretchen Whitmer is making would give Michigan by a wide margin the largest fuel tax in the nation.

Gov. Gretchen Whitmer had an important ally in what promises to be a fierce battle to pass a 45 cent gasoline tax to fix Michigan's horrid roads.

Most of the state's major business groups had set aside their anti-tax sentiments and committed to helping her get the huge increase through the Republican-led Legislature.

But then she allowed her liberal roots to tug her away from common sense governing and toward a partisan political agenda in the form of a 41 percent tax hike on small businesses.

It's an indefensible measure that splits away business support for her budget while placing an unnecessary burden on the state's primary job creators. 

More: Whitmer's budget proposal

MoreWhitmer sells gas tax hike with targeted tax relief

And its sole purpose is to provide a special tax carve-out for a traditional Democratic constituency — government retirees.

The $280 million raised by double taxing the income of small business owners will be used to excuse those collecting government pensions from the state income tax.

Snyder added the tax on all pensions in the interest of fairness — retirees without pensions have always had to pay the income tax on earnings from their savings and 401(k) accounts.

Whitmer restores the pension tax break only for government retirees. Private company pensioners will still have to pay.

Not only is the move blatantly unfair and boldly partisan, it sets up a needless fight with a Legislature that is already in shock over the size of her fuel tax hike request.

Hell will freeze over before Republicans agree to raise taxes on small businesses, the engine of Michigan's economy.

Taking a step back to the destructive policies of the Lost Decade just to provide special treatment for a favored group of taxpayers isn't going to fly with the GOP, nor should it.

So why pick a pointless fight that will only distract from Whitmer's stated top priority of "fixing the damn roads"?

Getting the fuel tax hike through the Legislature is battle enough. Public opinion is solidly against an increase, no matter what the size, but particularly one this stunningly large.

The request Whitmer is making would give Michigan by a wide margin the largest fuel tax in the nation. But it would also finally fix roads that are unquestionably the worst in the nation.

Whitmer will need all of her skill and energy to get the higher fuel tax through the Legislature. She'll also need the support of the business groups that typically have influence with Republicans.

Alienating an important ally with a gratuitous tax hike on small businesses is not a smart strategy.

Not only does it put business on the other side of the budget battle, it creates doubts about whether Whitmer is truly the pro-growth, moderate Democrat she portrayed herself as on the campaign trail. She'll find the business community that had been inclined to work with her much more suspicious of her intentions going forward.

As head of a divided government, Whitmer has to pick her fights carefully. She promised to fix the roads, and winning the funds she needs to get that job done should be her singular focus. 

Squandering political capital on a business tax hike that has no hope of passage is boneheaded. 


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