A SoapBlox Politics Blog
[Mobile Edition]
About
- About Us
- Email Us (news/tips)
- Editorial Policy
- Posting Guidelines
- Advertise Here
Feedburner

Subscribe to Michlib daily email summary. (Preview)
Enter address:

Donate
Become a sponsor and support our work.

 MichLib sponsor list

Michigan Political Blog Ad Network

Advertise Liberally

50 State Ad Network

Liberal Feed Network

Latest hand-selected Michigan political news and analysis headlines

2% or 21%

by: danscripps

Mon Jul 16, 2007 at 00:53:04 AM EDT


(From the diaries - promoted by lpackard)

Last week brought us some concrete examples of the cost of delay and the consequences of the Republican-driven cuts to Michigan's budget.  On Wednesday, Mike Bishop's alma mater, Oakland University, announced a tuition increase of 13.9% for next year.  Michigan State University followed suit with a 9.6% tuition increase, followed by Lake Superior State with a 9.3% increase and Grand Valley State University, which raised tuition by 9.9%.  And then there's Central Michigan University, which increased tuition by a whopping 21% for incoming freshmen!  And a number of schools have yet to announce their tuition schedules, meaning we're likely to see more of the same in the months ahead.

Worse, the combination of tuition increases and declining state aid for higher education means that the real increase is in the amount students have to borrow to finance their education, putting a college degree that much further out of reach for too many Michigan students.  According to a story reported by The Center for Michigan, while tuition has increased by 39% and state assistance has been slashed by 14%, the amount students have had to borrow in recent years has increased by an astonishing 47%!

All of this brought back memories of the shrill, knee-jerk reaction from the Senate Republicans and the Detroit News editorial board (but I repeat myself) to Governor Granholm's modest tax proposal earlier this year.  Remember, the governor proposed an extension of the sales tax - at a cost of two pennies on the dollar - to cover services.  This 2 cents would have allowed fewer cuts to Michigan universities, and almost certainly, smaller increases in tuition for Michigan students and their parents. 

Remember, increasing the number of college graduates in Michigan is something nearly everyone in Michigan agrees is central to any sustainable economic recovery.  As we move into the New Economy, it will be harder and harder for our state - and Michigan workers - to compete for these jobs of the future without the skills, training and education relevant to this knowledge-based economy.  And yet the continued cuts to university budgets and refusal to give universities the certainty they need to forecast for the future produces massive disincentives for young people to do exactly what we hope they will - go to college, graduate with a degree and stay here in Michigan to raise their families and build our future. 

The choice in the ongoing budget debate is not whether our costs will go up, but how.  Are we willing to pay a modest increase in taxes that all of us share in to build our future and get Michigan moving again, or are we going to pass the buck to make the skills we know we need to compete that much more expensive to obtain?  How our representatives answer that question will tell the citizens of this state much about where our priorities are and whether we care more about our children's future than our present situation. 

danscripps :: 2% or 21%
Tags: , (All Tags)
Print Friendly View Send As Email
2% or 21% | 1 comments
Stick a Fork in the 2% thing already (0.00 / 0)
Yes, we need revenue.  Yes, our current crisis is spurred on in large part by idiotic budget projections that banked on 1990's growth levels that have since headed south on us.  However, the "two penny scam," as I like to call it, is dead for good reason.  It was fatally flawed structurally, and as a piece of technical legislation, and our esteemed Governor is not being truthful in describing it as a 2% tax. 

Among the many technical flaws, this was a "strict liability" tax, whereby the service provider was automatically liable for the tax (2% of the gross charge), on the 15th of the month following the month the service was delivered, whether the recipient of the services ever paid their bill or not.  This is not a tax pass through, this is a subsidy paid by the service providers on behlf of the service consumers.  Even if the consumer pays in full, and on time (ask your attorney and accountant buddies how often that happens), the provider basically fronts the money (often for a month or more, based on monthly billing cycles and 30 day payment).  The list of who was covered and who was excluded was also a complete whore fest: the indistries or sectors prepared to lay out the bribes all were excluded.  It wasn't policy making, it was good old graft.  Here's a surprise: the guy that cuts your lawn for 30 bucks couldn't buy into the bribe game, but your doctor's insurance company sure could.

On the policy side, the tax didn't account for profit margin.  If a provider was making 10% on a transaction, and had a long term contract in place with a client (i.e., a contract to deliver the same service at an agreed price for a consistent term), the service provider would be contractually prevented from adding that 2% to the agreed-upon cost, and would have to eat it.  Thus, if you were making 10 cents on the dollar in pre-tax profit, and have to give back two, that so called 2% tax becomes a 20% tax on service provider profits.  In sectors where fractions of a cent (i.e., tenths of a cent in profit per unit) are made on transactions that repeat at high volume, 2% on the gross (which you must pay, whether the customer pays you or not) eats more than 100% of the profit, making all those long terms service contracts instant money losers.  How far would this tax get if it were accurately billed as the "20% profits tax" or "100% profits tax" or "150% profits tax"?  Not as far as it did, that's for sure. 

Yes on new revenue; no on the corrupt piece of crap they tried to hit us with.  Your lawn guy will thank you later. 


2% or 21% | 1 comments

Features

Change.org|Start Petition

Mobile Blog Reader - powered by Notice Orange
RSS
Politics & Elections Library:
-
US Senate
- US House
- Executive Branch
- Michigan Senate
- Michigan House
- State Supreme Court
- Michigan Media

Special Sections:
- Technical Politics - Grebner
- Michigan's Fallen

Search
Progressive Blogroll
For MI Bloggers:
- MI Bloggers Facebook
- MI Bloggers Myspace
- MI Bloggers PartyBuilder
- MI Bloggers Wiki

Statewide:
- Blogging for Michigan
- Call of the Senate Dems
- [Con]serving Michigan (Michigan LCV)
- DailyKos (Michigan tag)
- Enviro-Mich List Serve archives
- Democratic Underground, Michigan Forum
- Jack Lessenberry
- JenniferGranholm.com
- LeftyBlogs (Michigan)
- MI Eye on Bishop
- Michigan Coalition for Progress
- Michigan Messenger
- MI Idea (Michigan Equality)
- Planned Parenthood Advocates of Michigan
- Rainbow Mittens
- The Upper Hand (Progress Michigan)

Upper Peninsula:
- Keweenaw Now
- Lift Bridges and Mine Shafts
- Save the Wild UP

Western Michigan:
- Great Lakes Guy
- Great Lakes, Great Times, Great Scott
- Mostly Sunny with a Chance of Gay
- Public Pulse
- West Michigan Politics
- West Michigan Rising
- Windmillin'

Mid-Michigan:
- Among the Trees
- Blue Chips (CMU College Democrats Blog)
- Christine Barry
- Conservative Media
- Far Left Field
- Graham Davis
- Honest Errors
- ICDP:Dispatch (Isabella County Democratic Party Blog)
- Liberal, Loud and Proud
- Livingston County Democratic Party Blog
- MI Blog
- Mid-Michigan DFA
- Pohlitics
- Random Ramblings of a Somewhat Common Man
- Waffles of Compromise
- YAF Watch

Flint/Bay Area/Thumb:
- Bay County Democratic Party
- Blue November
- East Michigan Blue
- Genesee County Young Democrats
- Greed, Eggs, and Ham
- Jim Stamas Watch
- Meddling Outsider
- Saginaw County Democratic Party Blog
- Stone Soup Musings
- Voice of Mordor

Southeast Michigan:
- A2Politico
- arblogger
- Arbor Update
- Congressman John Conyers (CD14)
- Mayor Craig Covey
- Councilman Ron Suarez
- Democracy for Metro Detroit
- Detroit Skeptic
- Detroit Uncovered (formerly "Fire Jerry Oliver")
- Grosse Pointe Democrats
- I Wish This Blog Was Louder
- Kicking Ass Ann Arbor (UM College Democrats Blog)
- LJ's Blogorific
- Mark Maynard
- Michigan Progress
- Motor City Liberal
- North Oakland Dems
- Oakland Democratic Politics
- Our Michigan
- Peters for Congress (CD09)
- PhiKapBlog
- Polygon, the Dancing Bear
- Rust Belt Blues
- Third City
- Thunder Down Country
- Trusty Getto
- Unhinged

MI Congressional
District Watch Blogs:
- Mr. Rogers' Neighborhood (CD08)

MI Campaigns:
MI Democratic Orgs:
MI Progressive Orgs:
MI Misc.:
National Alternative Media:
National Blogs:
Powered by: SoapBlox