For decades, powerful Michigan business groups have led the anti-tax charge, warning that any increase would surely tank the economy.
During every downturn, they’ve blamed our tax burden, blithely ignoring reams of evidence that Michigan is not a high-tax state and it’s our continued dependence on the ever-downsizing domestic auto industry that makes our recessions so much sharper.
And business interests always have the same villain: tax-and-spend Democrats, who want to sell you on the wacky idea that good schools and clean drinking water (gasp) actually cost money.
The playbook was written by the absurdly well-funded Michigan Chamber of Commerce, which has helped obliterate national campaign finance law and whose lobbyists run circles around too many lawmakers who barely know where the Capitol’s bathrooms are before term limits hit.
The group also essentially functions as an arm of the Michigan Republican Party, although most of the media are too polite to say so.
Unlike unions, which typically feel obligated to endorse a few Republicans who they pray aren’t quite so awful on labor issues (and are usually proven wrong), the chamber almost never bothers to throw its support behind even the most business-friendly Democrats. And voting to raise taxes is a great way to lose business support — a lesson most Republican politicians have taken to heart.
The Michigan Chamber’s ultra-conservative bent goes well beyond economics. Try comparing its endorsement list to that of Right to Life of Michigan — there’s barely any daylight. And unlike other state chambers, ours refuses to back LGBTQ rights and even fought against immigrant rights when Lansing was considering sanctuary city status.
So in other words, when the Michigan Chamber says, “Jump,” most Republican lawmakers are quick to give the Pavlovian “How high?” response.
It’s worth considering that history when examining the current impasse between Democratic Gov. Gretchen Whitmer and the GOP-led Legislature over raising funds to fix our worst-in-the-nation roads and avert a government shutdown on Sept. 30.
This week, Michigan Chamber CEO Rich Studley thundered at a press conference that the Legislature (i.e. Republicans) should do something (i.e. raise taxes) to fix the roads (whose awful condition is hurting his corporate members).
He didn’t, of course, endorse Whitmer’s 45-cent gas tax hike to raise the $2.5 billion needed annually for roads because, well, she’s a Democrat, for one thing. It’s pretty clear the guv’s solution was settled upon to win business groups’ support, as they much prefer the “user fee” concept by which drivers pay to fix infrastructure, as opposed to business taxes or a graduated income tax that give them heart palpitations (and, you guessed it, they warn will ruin the economy).
The other reason why Studley didn’t go there is because Republicans who run the Legislature likely wouldn’t have cared if he did, thus revealing that the all-powerful chamber is fallible.
See, when you spend decades browbeating Republicans over taxes and banging the drum that all Democratic ideas must be destroyed, don’t be surprised when your acolytes don’t turn on a dime because you’ve decided this tax is OK.
Honestly, business groups could have saved themselves so much trouble if they just muscled through a comprehensive tax hike for roads during the Gov. Rick Snyder era, when Republicans controlled all branches of government.
After all, both Michigan House Speaker Lee Chatfield (R-Levering) and Senate Majority Leader Mike Shirkey (R-Clarklake) voted for a smaller tax hike in 2015 that experts correctly warned wouldn’t be enough to fix our infrastructure. It’s yet another failure for Snyder and Republicans, but also for business lobbyists who have been around long enough to know better.
This also undercuts the GOP bleating that they can never vote for tax increases, because, of course, they did — and quite recently. But because the governor was a Republican, we’re supposed to believe it somehow doesn’t count.
Then there’s the public, which doesn’t appear jazzed about a gas tax increase, either. There are lots of lazy stories about this that fail to mention influential business groups’ decades-long crusade against taxes and that Republicans at both the state and federal level recently hiked taxes on individuals while slashing rates for corporations. Naturally, that’s left a bitter taste in many people’s mouths.
That’s probably why a graduated income tax is overwhelmingly popular in Michigan. As I’ve been arguing all year — and some are just catching on — this could be the real solution, as most people like the idea of the rich paying higher tax rates while their tax bill gets cut. Coincidentally, the amount raised by a House Democratic proposal is $2.5 billion — which, by golly, is what’s needed every year for our roads.
The catch is that it would take a constitutional amendment determined at the ballot box, as there’s no way the GOP-controlled Legislature would ever pass it. It would take plenty of effort and money and we’d have to wait another year to really tackle our infrastructure problem — but there’s a growing consensus among progressive groups that it’s the only way Michigan will ever have functioning schools and roads.
Rich Studley, of course, would probably rather have his eyes gouged out with a hot poker than see a graduated income tax pass. You can expect that business groups will spend whatever it takes to defeat it.
The best way to avoid that fight is to marshal GOP lawmakers now for a road-funding plan, likely some variation of Whitmer’s gas-tax solution. Business groups know all the levers of power — withhold contributions, threaten Republican legislators with primaries and more.
The chamber has proven, time and time again, that it can get what it wants in Michigan. If the group fails to get Republicans in line on roads, that’s a pretty big chink in its once-unassailable armor.