Rewarding Corporations While Punishing Workers

    Our friends at ThinkProgress had a great piece yesterday on how different states are setting out to address their budget shortfalls. It would seem that not all states are seeking to balance their budgets on the backs of the middle class while at the same time handing away billions in tax breaks to the corporate class. Following is the piece in its entirety, but I’d encourage you to read the version of the ThinkProgress website, which is full of links.

    As a result of the Great Recession, states across the country are dealing with depressed tax revenues and record budget shortfalls, forcing them to make difficult choices to fulfill their constitutional balanced budget requirements. Some governors are pushing for progressive revenue raisers, in addition to steep spending cuts, to reduce these budget gaps. For instance, Govs. Brian Schweitzer (D-MT), Mark Dayton (D-MN), and Dan Malloy (D-CT) have all proposed closing corporate tax loopholes and cutting special interest tax breaks to bring more revenue into their states. However, several Republican governors have chosen a different path, proposing to shift the burden of deficit reduction onto middle- and lower-class Americans and public workers, gutting vital and popular services while increasing taxes on those who can least afford it. But these same governors have seen fit to simultaneously dole out new tax cuts to corporations, proposing increased corporate giveaways even as they ask their most vulnerable constituents to sacrifice. Today, the Progress Report evaluates the priorities conservatives have set in twelve states:

    – ARIZONA: Last October, as she ignored 26 other possible funding solutions, Gov. Jan Brewer (R) implemented painful cuts to the state’s Medicaid program, which resulted in two deaths and left 98 Arizonians waiting for transplant funding. After months of protests, Brewer finally agreed to set aside $151 million in an “uncompensated-care pool to pay health-care providers for ‘life-saving’ procedures, including transplants.” However, House Republicans refused to restore funding for organ transplants because, as House Appropriations Committee chair Jon Kavanagh (R) said, “not enough lives would be saved to warrant restoring millions in budget cuts.” Brewer eagerly signed into law tax cuts for businesses that will cost the state $538 million, and the state is proposing another $33 million in tax breaks for the for-profit college industry.

    – FLORIDA: At a Tea Party rally last month, Gov. Rick Scott (R) unveiled his budget, telling supporters that he would make the state the “most fiscally conservative” in the nation. He proposed slashing corporate income and property taxes, laying off 6,700 state employees, cutting education funding by $4.8 billion, and cutting Medicaid by almost $4 billion. Scott’s ultimate plan is to phase the Sunshine state’s corporate income tax out entirely . He has also proposed, with the Republican legislature, to gut Florida’s unemployment insurance system, leaving unemployed workers “with much less economic protection than unemployed workers in any other state in the country.” Local school officials have called Scott’s plan for school district funding “devastating.”

    – GEORGIA: Last week, the Georgia House passed a budget that will increase health insurance costs by more than 20 percent for state workers, teachers and retirees and cut funding for state universities by $75 million. The House has already gutted the state’s HOPE scholarship program, and is now considering implementing a regressive new tax system that would lower income taxes for the rich while raising the sales tax on basic necessities. House Majority Leader Larry O’Neal (R), meanwhile, has introduced a bill that would implement a flat income tax rate and cut corporate taxes by 33 percent.

    – IOWA: Gov. Tom Branstad (R) began this year proposing a budget that included a $200 million tax cut on commercial property taxes and corporate income, but would freeze spending on schools, cut $42 million to state universities and lay off hundreds of state workers. The budget is now moving through the politically divided legislature, where Republican-controlled House committees have gone even further, approving tax refunds for upper-income Iowans while cancelling infrastructure investments, cutting universal preschool for 4-year-olds, closing Iowa workforce development offices, and making even deeper cuts to public universities.

    – KANSAS: Facing a $493 million budget shortfall, Gov. Sam Brownback (R) has called for eliminating his state’s corporate income tax, while proposing a $50 million cut to education. With majorities in both Houses, Republicans have proposed a cut to the federal Earned Income Tax Credit that would push 6,500 families below the poverty line.

    – MAINE: Despite calling for “shared sacrifice,” Tea Party Gov. Paul LePage’s (R) budget would cut income taxes for Maine’s wealthiest one percent, while actually raising property taxes for the state’s middle class. This so-called “jobs budget” freezes healthcare funding for working parents, cuts money for schools and infrastructure and raises the retirement age for public workers. Yet LePage was still able to find more than $200 million in tax cuts for large estates, businesses and the rich. He also exempted himself from the pension changes he wants other public employees to accept.

    – MICHIGAN: Gov. Rick Snyder’s (R) budget would make Michigan’s already regressive tax system even worse for the state’s poorest residents. The plan cuts taxes on business by more than 86 percent while slashing $1.2 billion in funding for education and local government. Snyder also wants to raise personal taxes by 30 percent — an increase that will fall ten times harder on Michigan’s lowest income residents than its richest. Snyder also signed into law a new measure that allows him to declare a “financial emergency” in Michigan towns and schools districts, and then give a state-appointed financial manager power to dismiss local officials and void contracts.

    – NEW JERSEY: Last year, Gov. Chris Christie’s (R) budget raised taxes on the working poor and middle-class by cutting the state’s Earned Income Tax Credit and homestead rebates — yet still found money for lucrative corporate tax cuts. This year, Christie has called for $200 million in business tax cuts, while proposing to cut mental health services, cut $540 million from Medicaid, and withhold property tax rebates for seniors until public workers give up many of their health and pension benefits. Many New Jerseyans have said they prefer a tax on millionaires to Christie’s draconian cuts.

    – OHIO: Gov. John Kasich (R) has proposed cutting 25 percent of his state’s education budget, $1 million from food banks, $12 million from children’s hospitals, and $15.9 million from an adoption program for children with special needs. A Kasich staffer revealed that these cuts are more about politics than budget-balancing, telling the Cincinnati Dispatch that “even if there weren’t an $8 billion deficit, we’d probably be proposing many of the same things.” The plan includes tax cuts for oil companies, a repeal of the Ohio estate tax and an income tax cut for the rich that former Gov. Ted Strickland (D) halted last year because of the state’s fiscal crisis. Kasich has also announced that he’d like to open his state’s parks to oil and gas drilling.

    – PENNSYLVANIA: Gov. Tom Corbett (R) presented a budget last week that would cut taxes for corporations, while freezing teacher salaries, cutting dental care for Medicaid recipients, and cutting $1 billion in education funding. But the state could raise significant revenue from ending special interest tax breaks and by levying a fee on companies that use the environmentally destructive “fracking” technique to obtain natural gas, which has reaped them hundreds of millions of dollars in profits. Pennsylvania is the only state in the nation’s top 15 gas producers that doesn’t levy a tax on this environmentally destructive industry, but Corbett has refused to tax these companies, many of which helped fund his gubernatorial campaign. Corbett’s education cuts also hit students from poor districts ten times harder than students in wealthier districts.

    – SOUTH CAROLINA: Gov. Nikki Haley (R) has proposed ending the state’s corporate income tax, even while she calls for cutting education funding and Medicaid. But Haley has received pushback from Republican colleagues: last week the legislature rejected her plan to force state employees to pay more for health insurance.

    – WISCONSIN: The tax cuts Gov. Scott Walker (R) signed into law earlier this year worsened his state’s fiscal condition and were used as justification for his bill stripping collective bargaining rights from public workers. Now Walker is planning to eliminate $26 million in tax credits for seniors and single mothers and cancel property tax rebates for low-income Wisconsinites making less than $24,000 a year. He has also proposed legislation to dismantle his state’s Medicaid system.

    And if it sounds like all the Republican governors are reading from the same playbook, that might be because they are.

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      35 Comments

      1. f mink
        Posted March 19, 2011 at 5:40 pm | Permalink

        It’s good to know that a few states in the nation are trying to close corporate loopholes and tax the wealthy before shutting down schools and milking the middle class. Unfortunately I do not live in those places.

      2. Rhet
        Posted March 20, 2011 at 3:32 am | Permalink

        If it’s class warfare that the conservatives want, it’s class warfare that they’re going to get.

      3. Glen S.
        Posted March 20, 2011 at 9:32 am | Permalink

        This whole thing strikes me as “franchised” state (and perhaps, soon, local) government.

        For example, a restaurant owner who decides to franchise doesn’t need to worry about his restaurant’s architecture, design, menu, uniforms, prices, etc., since they have all been decided for him by “corporate.”

        Likewise, it seems that politicians who follow the ALEC route need not worry about or address their particular state or region’s unique conditions, needs or concerns, but rather — simply follow the legislative playbook that has been predetermined (and sometimes pre-written) for them by corporate-sponsored right-wing think tanks.

        Unfortunately, I predict the end-result will largely be the same: Instead of customized, locally-sourced and “home-cooked” legislation capable of effectively addressing local conditions and needs — we’ll end up being forced to accept an array of crappy 99-cent “McGovernment” value-meal laws.

      4. Lorie Thom
        Posted March 20, 2011 at 11:00 am | Permalink

        Here is the thing. I align closely with Glenn in my feelings about this stuff but not at the same level of emotion.

        One of the things that is making me mad is that the governor’s proposed budget isn’t actually backed by data or historical reality.

        We have cut corporate taxes before and go nothing for it. We have cut income taxes before and accomplished nothing for it. So why does my neighbor not know this? Why does my my neighbor, who’s pension will be taxed, no know that history does not support this?

        Why isn’t anyone talking about past budgets and tax cuts and the economic results from those cuts? (which were un-repaired (or badly repaired) roads, larger public school class sizes etc).

        This is just a more extensive version of things Repub Gov’s have done in the past that got us into the mess we have now for the state budget – why isn’t there any reasonable messaging coming from the opposition. Thats the failure in my book. Really shitty leadership from the dems.

      5. TaterSalad
        Posted March 20, 2011 at 11:13 am | Permalink

        The Chevy Volt is a joke and an even bigger problem………a scam on the american taxpayers:

        http://www.moonbattery.com/archives/2011/03/government-moto-5.html

      6. Glen S.
        Posted March 20, 2011 at 11:42 am | Permalink

        @ Lorie.

        I agree with you: Granholm and the Democrats left us with a budget disaster — which the Republicans now seem intent on turning into a catastrophe.

        We cannot “cut” our way to prosperity.

        The only answer is a holistic and longer-term focused approach that combines greater efficiency and modest cost-cutting with modest tax increases and a more progressive (balanced and fair) tax structure.

        At this point, I don’t see anyone in a leadership position on either side of the aisle with either the vision, or the courage, to promote this.

      7. heidi
        Posted March 20, 2011 at 11:52 am | Permalink

        Want to try balancing Michigan’s budget..try this
        http://janus.pscinc.com/budgetsim/default.aspx

        Interestingly enough, the budget could be resolved by doing four things and bypassing all of this mess that Snyder is proposing:

        Extend Sales Tax to Personal Services: Lowers all sales taxes from 6 to 5.5 %, but taxes many new services, including home/car repairs/maintenance, cable and satellite TV, legal services, live entertainment. $1,000,000,000

        Raise Sales Tax from 6 % to 6.5%: Requires constitutional amendment to earmark new revenues for general fund only $600,000,000

        Tax Soft Drinks: 5.5% tax on all carbonated soft drinks. $83,000,000

        Raise Beer Tax for first time since 1960s: Increases beer tax from 2 cents to 6 cents per bottle. Increases wine tax from 1 cent to 3 cents per liter. $106,000,000

      8. Lorie Thom
        Posted March 20, 2011 at 2:40 pm | Permalink

        @Glen

        Philosophically, I agree with you however…prescription before diagnosis is malpractice. I see we have a budget gap – what I don’t see is a single damn Dem up there with the data showing us the history (of how corporate give-aways don’t help our economy) and presenting an alternative.

        However, the data is there on two issues that I am decided about.
        1) Snyder’s give-away to businesses is wrong. Business in this state get more than their fair share of government welfare and like all welfare, its not “value for money”. Its a hand out, some may need it but make ‘em prove they need it first. This state shouldn’t hand over hunks of its budget to corporate fat-cats who aren’t accountable to anyone without a proven need, a drug test for the executive team, a lifetime limit and a little bit of stigma on asking for a hand out.

        My second issue is education. I have been talking to a series of business owners and excutives about the issues they face in opening new facilities and asking how they think Michigan stacks up. Michigan flunks the: “Can I recruit and retain people who are qualified” test. Flunks in two ways:

        1)our education system here has produced a work force that isn’t all that educated, has high levels of illiteracy and relatively fewer 4 YEAR (not community college) degreed folks.
        2) because our public education system sucks(see all the various metrics) compared to so many other states, it stands out in any conversation about relocating highly educated professionals here – and the cost of private education is an added burden in attracting families to move here and given the ratings on line.

        Snyder’s budget makes both issues much worse. Add to that the instability of services delivered by what looks like 175 schools districts and cities and Wow, well, its hard to see how those who have a choice will actually stay in Michigan, never mind people deciding to come here.

      9. TaterSalad
        Posted March 20, 2011 at 3:44 pm | Permalink

        “The principal feature of American libtardism is sanctimoniousness. By loudly denouncing all bad things–war and hunger and date rape–liberals testify to their own terrific goodness. More important, they promote themselves to membership in a self-selecting elite of those who care deeply about such things… It’s a kind of natural aristocracy, and the wonderful thing about this aristocracy is that you don’t have to be brave, smart, strong, or even lucky to join it, you just have to be libtard.”

        - P. J. O’Rourke:

      10. JSam
        Posted March 20, 2011 at 5:15 pm | Permalink

        Repugnants are the party that says government doesn’t work…then they get elected and prove it. Proof positive? Slick Rick.

      11. Posted March 20, 2011 at 5:48 pm | Permalink

        Do you guys post the same shit on every page on this site?

      12. EOS
        Posted March 20, 2011 at 5:53 pm | Permalink

        Your neighbors are tired of rewarding incompetent government with even more tax dollars. Using Glen and Lorie’s reasoning there is no incentive for government to operate efficiently. The worse the results – the more money we throw at them.

        Without jobs, the middle class can’t pay taxes, so it is important that the state have a business friendly environment. If a business owner makes 100 times more than me then he should pay 100 times more tax. That’s a fair and balanced tax structure and that’s what we have with a flat rate.

        However, if you advocate class warfare, then the person who makes 100 times more money would have to pay 1000 times more tax. Few would venture to risk their capital in such an unfair system, especially when they could relocate to Texas or Florida and pay nothing.

        Welfare is taking money from the persons who’ve earned it to give to those who haven’t. Allowing a business owner to keep most of what they earn is not welfare by any stretch of the imagination.

      13. Lorie Thom
        Posted March 20, 2011 at 6:26 pm | Permalink

        EOS – Michigan’s corporate taxes are very competitive with other states.
        http://www.taxfoundation.org/taxdata/show/22661.html

        We do not have a competitive work force. This MEDC report is has some pretty rosy view.
        http://www.themedc.org/cm/Files/Reports/MI%20Benchmarking%20Summary%20Brief.pdf
        Cutting schools into a deeper uncompetitive status at all levels is certainly not value for the money and will not bring jobs to this state any more now than it has in the past.

        Your posit is that our state government operates inefficiently – please explain. What is inefficient? Its an easy dogmatic comment to make but show me where those rafts of lazy, fat-cat, government workers are.

        Tax breaks and incentives from the State Economic Development Corp and the various other places our state government gives money to corporations are indeed welfare on a grand scale. And no, those business haven’t earned it anymore than anyone else.

      14. Posted March 20, 2011 at 6:46 pm | Permalink

        There’s nothing inherently fair about a regressive tax structure.

      15. Glen S.
        Posted March 20, 2011 at 6:57 pm | Permalink

        @ EOS

        Fine, I’ll agree to a “flat” tax rate — as long as wealthy individuals and corporations also agree to give up all the deductions, exemptions, credits, subsidies and tax shelters that allow many of them to pay little or no tax; and certainly a much lower percentage of their income than 99% of working- and middle-class Americans.

        Regarding the business appeal of such low-tax states such as Texas, it is worth noting the Lone Star State, which has a population approximately 2.5 times that of Michigan, recently announced a budget deficit of $27 BILLION dollars — or approximately 17 TIMES that of Michigan’s artificially-inflated deficit of $1.58 billion. In addition to slashing funding for health care, education and transportation, etc., Texas plans to cut funding for “business and economic development,” by $3.3 BILLION — or approximately 1/3 of Michigan’s entire FY 2012 general fund budget.

        And, as for advocating “class warfare,” I’m afraid that horse is already out of the barn — the door to which has been wide open since the election of Ronald Reagan and pals, circa the early 1980s.

      16. EOS
        Posted March 20, 2011 at 7:06 pm | Permalink

        Glen,

        I agree with your first paragraph. Cut the deductions, exemptions, credits, subsidies and tax shelters. Peter knows more about that than I do. I pay taxes each year.

        Texas’ problems aren’t due to the lack of state income taxes but to the large number of illegal aliens for who they have to provide benefits. Apples and oranges.

        The class warfare was started by Wilson and Roosevelt. It’s an issue of the “progressives” not the conservatives. Reagan was successful in correcting some of the injustice.

      17. EOS
        Posted March 20, 2011 at 7:10 pm | Permalink

        Forgot to mention, corporations pay no tax at all. They merely pass the costs to consumers with higher prices. The middle class already pays all the corporate tax as well.

      18. EOS
        Posted March 20, 2011 at 7:13 pm | Permalink

        “For whom”. Mrs. Lowry would be so disappointed. My bad.

      19. Posted March 20, 2011 at 7:18 pm | Permalink

        “Texas’ problems aren’t due to the lack of state income taxes but to the large number of illegal aliens for who they have to provide benefits. Apples and oranges.”

        The bigot speaks.

      20. EOS
        Posted March 20, 2011 at 7:21 pm | Permalink

        I guess in Peter’s mind it is bigoted to want hospitals to be financially stable.

      21. L. Toomey
        Posted March 20, 2011 at 7:44 pm | Permalink

        I was pretty sure when I read this article at AnnArbor.com that it was about either EOS, Designated Republican or Taters. As EOS and Taters have both posted this evening, I guess it must be Designated Republican.

        http://www.annarbor.com/news/crime/man-accused-of-breaking-baseball-bat-over-friends-head-during-nascar-argument-to-get-competency-exam/

      22. EOS
        Posted March 20, 2011 at 10:32 pm | Permalink

        Lorie,
        Thanks for the links. I’m glad you think that Michigan Corporate tax rates are competitive. Let’s keep them that way. I’m not the one suggesting we raise taxes.

        Since you believe that our workforce is not competitive due to poor education, then why would you advocate spending more money on the existing system? Wouldn’t it be more logical to invest in new strategies to achieve a better outcome? If DPS is failing on a grand scale, why not allow or better yet encourage migration to new Charter Schools?

        If our state gives a tax break to a business that moves here to provide jobs it is not “giving money to corporations”. The earnings of the new employees are taxed by the state. The state has a net gain. My tax dollars haven’t been transferred to the corporation and less tax dollars are spent on providing for the formerly unemployed. After a limited number of years, the net gain to the state further increases when the tax break expires and the new firm pays the existing corporate rate.

      23. Posted March 21, 2011 at 7:35 am | Permalink

        No, in my mind it’s bigoted to blame a voteless minority on a state’s problems.

        As for health care, it’s bigoted to promote denying care to a ill or hurt person simply based on their immigration status.

        I’m sure, that you yourself, as a caring Christian, would be the one to tell the pregnant, immigrant lady to take her pregnancy elsewhere because her dirty anchor baby cuts in to the profit margin of the hospital. Yes, you would.

      24. Edward
        Posted March 21, 2011 at 8:16 am | Permalink

        If I recall correctly, Mary, in a similar position, was told to go and give birth to her baby in a stable, with the animals. And he grew up OK. Immigrants should have the same opportunity today.

      25. Posted March 21, 2011 at 8:54 am | Permalink

        Yes, we need to have more stables so that children can be birthed in animal shit. If it was good enough for Jesus, it’s good enough for the rest of us.

      26. John Galt
        Posted March 21, 2011 at 12:50 pm | Permalink

        EOS, do you know where Taters lives? I’ve got something that I need to talk to him about in person.

      27. EOS
        Posted March 21, 2011 at 1:49 pm | Permalink

        John, I thought you were Taters as well as half the other names on this site. It’s hard to keep track of all the identities and writing styles. I don’t know Taters, but I do like taters with my steak and Tater salad for picnics. Does that count?

      28. TaterSalad
        Posted March 22, 2011 at 12:23 pm | Permalink

        Michigan Unlimited Personal Injury Costs ranks the highest in the nation. This needs to be corrected by legislation immediately. Please write your representatives and demand corrections:

        http://autos.yahoo.com/articles/autos_content_landing_pages/1780/auto-insurance-costs-where-does-your-state-rank/

      29. TaterSalad
        Posted March 22, 2011 at 12:31 pm | Permalink

        Understand what “REALLY” is going on:

        http://www.theblaze.com/stories/revealed-the-lefts-economic-terrorism-playbook-the-chase-campaign-for-a-coalition-of-unions-community-groups-lawmakers-and-students-to-take-down-us-capitalism-and-redistribute-wealth-power/

      30. Meta
        Posted March 24, 2011 at 10:01 am | Permalink

        From ThinkProgress.org:

        All around the country, right-wing legislators are asking middle class Americans to pay for budget deficits caused mainly by a recession caused by Wall Street; they are attacking workers’ collective bargaining rights, which has provoked a huge Main Street Movement to fight back.

        Now, a group of House Republicans is launching a new stealth attack against union workers. GOP Reps. Jim Jordan (OH), Tim Scott (SC), Scott Garrett (NJ), Dan Burton (IN), and Louie Gohmert (TX) have introduced H.R. 1135, which states that it is designed to “provide information on total spending on means-tested welfare programs, to provide additional work requirements, and to provide an overall spending limit on means-tested welfare programs.”

        Much of the bill is based upon verifying that those who receive food stamps benefits are meeting the federal requirements for doing so. However, one section buried deep within the bill adds a startling new requirement. The bill, if passed, would actually cut off all food stamp benefits to any family where one adult member is engaging in a strike against an employer.

        The legislation can be seen here.

        http://thinkprogress.org/?p=152559

      31. Chairman Meow
        Posted March 24, 2011 at 12:11 pm | Permalink

        You strike, you starve!

        You don’t strike, you starve.

      32. TaterSalad
        Posted March 24, 2011 at 3:19 pm | Permalink

        Liberal Cranium Containment Systems are now going to be built.

        http://www.moonbattery.com/archives/2011/03/moonbat-tech-th-11.html

      33. TaterSalad
        Posted March 25, 2011 at 3:02 pm | Permalink

        Van Jones at a rally “after” 9/11 and telling the audience that America deserved this one!

        http://www.youtube.com/watch?v=7ZjD-Km1C6Y&feature=player_embedded

      34. EOS
        Posted March 27, 2011 at 7:10 am | Permalink

        http://www.pantagraph.com/news/local/article_3c23590c-572a-11e0-afc0-001cc4c002e0.html

      35. Stephen
        Posted March 30, 2011 at 11:22 am | Permalink

        Some good news for a change. A new poll seems to show that people are finally coming around to the realization that the Tea Party doesn’t have their best interests in mind.

        http://politicalticker.blogs.cnn.com/2011/03/30/cnn-poll-unfavorable-view-of-tea-party-on-the-rise/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fcnn_politicalticker+%28Blog%3A+Political+Ticker%29

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