Trump has two top legislative priorities: "Tax Reform" and "Repeal the ACA". Today, they intersected: his "Tax Reform" plan cuts exactly one tax from the ACA - the 3.8% Medicare tax on Net Investment Income for high-income taxpayers. It has long been a badly-kept secret that the driving force behind "repeal the ACA" has been... Continue Reading →
Channelling is an important element of the tax system. We have no other way of rewarding - therefore, encouraging - good behavior. And we can't punish - therefore, discourage - bad behavior except by making it illegal, and our Constitution and other rights often prevent us from doing that.
So, four years ago, we took $1.65 billion dollars out of the state coffers and gave it to businesses, then tried to replenish that money by reaching into the pockets, wallets and pensions of our low-income and middle-income taxpayers. Not surprisingly, the state found itself short -- to the tune of $1.2 billion dollars -- of the funds needed to provide the obvious services that affect the public everyday -- school funding, local government services, and most frustratingly, roads that aren't literally falling apart. Poor Michigan! We're Broke! Now comes the Governor and the Legislature telling us that we need to tax ourselves -- predominantly, tax the lowest-income people in the state -- even further.
We have tried government rewards for a promise of performance. But that is contrary to all common business behavior. We should turn that around. The driving principle is the reversal of the discredited belief that tax cuts create jobs. They do not. That principle must be discarded and replaced with: "Good Jobs Create Tax Cuts".