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How the GOP tax bill would ruin Michigan



What would the Republican tax bill now working its way through Congress mean for Detroit? What would it mean for our state, and especially, for rising young adults just starting out in life?

Literally, nothing good.

"I think this is just bad policy," Charles Ballard tells me right as the bill is approaching passage in the House of Representatives. Ballard is a professor and former chair of the economics department at Michigan State University.

Seven years ago, his book Michigan's Economic Future: A New Look, got excellent reviews. That's a lot more than he gives to this tax plan, which would indeed rob from the middle class to give to the super-rich. "The first thing to say is that we shouldn't even be talking about a tax cut now, with the economy at or near full employment," he says.

The myth that this will somehow stimulate businesses to hire new workers is precisely that — a myth. "There just isn't a big reservoir of unemployed workers," he says. Not, that is, of adults in the labor force with skills who want jobs.

Plus, as we've seen over and over again, when corporations do come into a windfall, they seldom rush to hire new employees.

"I'm less optimistic now than I was 30 years ago that corporate tax reform will do much of anything for workers, even in the long run," the 63-year-old Ballard tells me. "That's because of a change in the culture that dominates the corporate world. A generation ago, the first instinct of many CEOs was that, if they received a windfall like a tax cut, they would use the money for productive investments."

Now, forget that. "The first instinct of far too many CEOs is to increase dividends, buy back shares to pump up stock prices, and/or go for mergers and acquisitions. None of those things adds anything to the productive capacity of the economy."

Apart from that, what would the plan mean for individuals? Well, it would be great for one Donald J. Trump, who, according to an analysis by John Cassidy in the Sept. 28 New Yorker, might save millions of dollars a year. For Mr. and Ms. Sterling Heights, not so much.

"Let's compare the effect on two married couples, both of whom get all their income from wages and salaries," Ballard says. "The first married couple with a taxable income of $1 million, would get a tax cut of just under $29,000," the economist told me.

The second married couple, with taxable income of $40,000, which is in the ballpark of the taxable income of the average Michigan family, would get a tax increase of $800," he says.

Actually, many might not be that badly hit, he adds. As the plan now stands, there would be an increase in the standard deduction and in the child tax credit. "But the notion that this is tilted towards average families is ridiculous," he says.

The Republican tax plan is, however, tilted against colleges and universities, and anyone who wants to better themselves by going to them. For years, Congress and the state legislature have made it harder and harder to get higher education in this country, just when the need for it in this society is greater than it has ever been.

Tuition has shot way up from what it was for baby boomers, in large part because government support has been so much less.

Now, this tax plan would deal a crippling blow to universities by counting things like stipends and tuition waivers as income and taxing them. Doug Neckers, an organic chemist, went to Hope College as an undergraduate, and rose to become the McMaster Distinguished Research Professor at Bowling Green State University in Ohio.

"The big loser in the House version [of the tax bill] is higher education," says Neckers, who incidentally has long regarded himself as a Republican. "It will kill graduate programs in universities if stipends and tuition waivers are taxed. Foreign students won't be able to afford a graduate education, and Americans won't want to live on poverty wages either. That taxing of stipends has to come out, and I think the taxing of endowments short-sighted too."

Neckers, who is 79, has won international awards for mentoring students and holds 65 patents himself. "Higher education is expensive, but ignorance and stupidity more so," he said.

Those sentiments were echoed by Bill Haney, one of the closest things this area has to a Renaissance man. He grew up in what is now Troy, in a house without indoor plumbing, during the Great Depression. Haney, 81, managed to attend the University of Michigan, and has been everything from an executive in the aerospace industry to the publisher and author of many books.

He's a mild-mannered man, but when he saw U.S. Sen. Orrin Hatch (R-Utah) claiming "he was sick of this crap" in response to those who blasted the tax bill as being for the rich, Haney lost it.

"I've been sick of it for decades myself," he said in an open letter to Hatch. "So let's enact true tax reform. Let's create a genuinely equitable tax code. Loading further burdens onto the very college students we need to succeed and to remain in his country is simply not good business."

He added, "since I live in farm country and have always grown crops I can justly say that to starve education to underwrite selective tax cuts is to eat the seed corn."

Haney concluded that "such disregard for our nation's well-being and future is counter to the fundamentals of true conservatism."

Hope he doesn't hold his breath till Hatch writes back.

False equivalence

I have no idea where Senator Al Franken's career will be, or what other allegations may have surfaced by the time this appears. There should be no tolerance whatsoever for genuine sexual harassment, ever.

But at the risk of being charged with being a pig myself, I would argue there seems to be a difference between Franken's behavior and what's being alleged of Roy Moore, the judge running for the U.S. Senate in Alabama. Franken supposedly gave Leeann Tweeden a slimy unwanted kiss when the two were on a USO tour in 2006, and then mugged for the camera by posing over her sleeping, leering with his hands poised over her breasts under a military flak jacket.

Was all this gross and immature behavior?

Beyond any doubt. Nobody should touch anyone against their will. Would she have been justified in slapping his glasses off his puss if the kiss actually happened? Damn right. However, at the time, Franken was a comedian who hadn't yet gotten into politics.

And frankly, when I first saw the picture, I thought Franken was doing a parody of a creepy harasser.

But as repellent as all this may be, is it the same as an adult who was already a public official — a deputy district attorney — trying to get a 14-year-old girl to touch his genitals through his underwear, or forcefully kissing and manhandling other teenage girls?

Franken, by the way, issued an abject apology for his actions; Moore has denied everything — except for dating teenagers when in his 30s. However, as Senate Majority Leader Mitch McConnell (no liberal by anyone's standard) said, "I believe the women."

There are those who are urging Franken, who until now has been widely praised as a good and effective senator, to resign.

There are also those who think Roy Moore, who was twice thrown off the Alabama Supreme Court for violating the Constitution, still should win the Dec. 12 special election.

Sometimes the world is just freaking nuts.

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