The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Tax cuts for wealthy mean permanently reduced services

Mar 15, 2004

Michigan Governor Jennifer Granholm and others constantly say that cuts in state services and concessions by state employees are necessary in the face of the state's poor economy. They would have us believe it's because the dependence of Michigan's economy on manufacturing has meant its recovery has lagged behind the rest of the country.

It's a lie. The budget shortfall is a result of an enormous change in who pays the taxes in the state of Michigan as well as on the federal level. A report by the Michigan League for Human Services shows that over two-thirds of Michigan's budget deficit from 2001 to 2004 has been due to tax cuts that have mainly benefitted the wealthy and the corporations.

These cuts include reductions in the Single Business Tax and the Personal Income Tax. Michigan's Single Business Tax is scheduled to be eliminated by 2009. Michigan's income tax is to be reduced each year through 2005. The one% with the highest incomes in Michigan will save 90 times more because of these cuts than the lowest twenty%.

This comes on top of George Bush's federal tax cuts that also favor the wealthiest people in Michigan. By 2006, Michigan's richest one% will receive twice as much as the poorest sixty% will get from Bush's tax cuts.

These cuts in taxes for the wealthy will be permanent. They will receive the benefits in good times or bad, since their incomes are not as sensitive to the state of the economy as those of working people. And that means the state will continue to have a so-called "budget crisis" and the politicians, both Democrat and Republican, will call for bigger and bigger sacrifices by the population.

"Budget deficits" are nothing but an excuse to slash public services, social programs and education while increasing fees and taxes on working people. The plan to keep cutting taxes on the wealthy and the corporations carries with it the intention to spend less money for roads, schools, health care, social services, the arts, and everything else that the state government provides. It means they will ask for even greater concessions from state employees.

Stopping these tax cuts would not have to mean workers would pay more in taxes. Keep the tax cuts for working people and increase the taxes on the corporations and the wealthy! Why not?