Bipartisan addiction to tax cuts

By • on April 18, 2013

I have written previously that the state budget policy on a bipartisan basis for two decades has made tax cuts, corrections and health care the priorities. Which by necessity –– or as Bill Clinton says math –– has meant that education, particularly higher education, and support for local governments have been devastated.

Saying you are in favor of these public investments while proposing large tax cuts with no replacement revenue means you are not really in favor of increased public investments in education, infrastructure and quality of place.

Saying you are in favor of these public investments while proposing large tax cuts with no replacement revenue means you are not really in favor of increased public investments in education, infrastructure and quality of place.

Every time I write this I hear from my conservative friends that the Democrats don’t really believe in tax cuts. What matters, of course, is what they do and how they vote. Now we have more evidence of tax cuts as the priority on both sides of the aisle. The House Democrats have just released their budget priorities with more tax cuts front and center. And, what matters most, no replacement revenue. Its one thing to favor shifting the tax burden away from low and middle income households to corporations or upper income households. (Or as Governor Granholm and Business Leaders for Michigan previously proposed a sales tax on services.) But that is not what the House Democrats proposed.

If implemented, these tax cuts, just like those of the last two decades, would have the same effect: diminish the state’s ability to make public investments in education, infrastructure and quality of place. The things that matters most to growing the economy. Saying you are in favor of these public investments while proposing large tax cuts with no replacement revenue means you are not really in favor of increased public investments in education, infrastructure and quality of place.

The budget policies we need as I wrote previously would follow the framework proposed by Thomas Friedman and Michael Mandelbaum in their book That Used to Be Us:

  • Spending cuts followed by spending restraints (Michigan, not the nation, has already done the spending cuts)
  • Making public investments that grow the economy, particularly education and infrastructure
  • Higher taxes

It’s the framework Governor Blanchard followed successfully and that President Obama proposed for the nation in his latest budget. They agreed with Friedman and Mandelbaum who wrote: to assure our “… economic future we will have to spend more, not less, on some things: infrastructure and research and development, and probably education as well.”  And to produce the revenue to make those strategic investments requires both spending restraints and tax increases.

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