Thursday, June 13, 2013

Michigan GOP Gives Big Business $31+ Billion in Corporate Welfare Yet Demands Drug Test for the Poor

Michigan gives big business $31 billion in corporate welfare yet demands drug tests for the poor.
Why no drug test for Whole Foods CEO John Mackey?


Michigan currently grants $31.49 billion in tax credits with little transparency or accountability that ensures they are effective in growing our economy or job market. Once created, these tax credits typically live on forever, despite projections showing Michigan will actually hand out $11.57 billion more in tax credits than we will take in from tax revenues in 2013.

A recent example is the Whole Foods Market that opened in Detroit. It was given much ballyhoo about being the first major chain to open in Detroit for several decades. What wasn't mentioned in the news is that the only reason they did it is they got paid $5.8 million in equity. The store cost $12 million of which $5.8 million was paid for with state and local money. Whole Foods by the way had a pretax profit of $4.1 billion in 2012, yet somehow they are deserving of welfare when state republicans are trying to do things like force poor people to take drug tests just to get a measly couple bucks worth of food stamps a day?

Supporters of the drug testing measures laughable claim they are designed to break the cycle of poverty by helping drug users find treatment and encouraging parents to send their children to school. Opponents rightly point out the measures are punitive attacks on low income individuals who rely on state assistance to get by. This twisted logic might make a grain of sense if you could over look the fact these very same people are also out to destroy public schools with draconian funding cuts and union busting right to work for less laws.

People who test positive for the first time would be referred to a substance abuse treatment center and could continue receiving benefits throughout their treatment. But if a person tests positive subsequent times or drops out of treatment their family benefits would end. Little Billy and Suzie has no food or shelter, gee next time pick better parents is the thinking here. The unspoken part of this however is the person would now have a criminal record. Thus making it virtually impossible to get any job short of panhandling on a street corner. The GOP knows this, and they know people know it. Their hope is this will frighten people into not applying or dropping out. The less the state has to spend helping average citizens the more welfare they can lavish on their big business friends from ALEC.

We need to end Reverse Robin Hood Corporate Welfare in Michigan NOW!


The industries that I think about the most … are more sensitive to the quality of talent in a location than they are to the tax policies. – Bill Gates

Q: Isn’t this just the same old talk about closing loopholes?
A: Nope, while loopholes are a component of the discussion, tax simplification is much bigger than that alone. This issue is about ending Reverse Robin Hood Socialism the GOP and Corporate Democrats are so fond of. Tax credits are not loopholes or deductions, they direct payments just like food stamps or welfare.

Q: I thought Republicans said they were eliminating all tax credits?
A: Heavens no, that's crazy talk.  You have to look at what they do not what they say. Their tax changes cemented in twenty more years of tax credits.

Q: So does Michigan need to give tax credits to be competitive?
A: Tax credits are a bad idea that has run wild. Instead of heaping unaccountable handouts onto big corporations which never worked, we need to educate all our kids and define Michigan as the best place to locate a business.

Furthermore, Big Business plays city against city and state against state. It is quite common for a business who has been refused tax credits to simply move to the city on the other side of a street. In many cases though it's state versus state in this high stakes game of who can give the most Reverse Robin Hood Welfare to big business.

A long time Michigan icon PulteGroup, just shocked locals by announcing they are moving to Atlanta. Again what the corporate media isn't telling residents is that they are getting $10 million to do so. This only further illustrates that corporate welfare is a suckers game, the second it runs out they leave like a thief in the night.

Michigan will only build a growing, thriving economy if we invest in the people by making college affordable and properly maintain our infrastructure. Over the last decade funding for higher education in Michigan has been slashed 68% and we have some of worst roads in the nation.

Q: Won’t an automatic sunset on tax credits fail to provide businesses with the certainty they need to plan and invest in Michigan?
A: We shouldn’t support corporate welfare, and especially when a state tax credit will make or break a business. A perfect example is the movie industry.

Not long ago Michigan had the highest incentive for movie production in the country. The state was literally paying wealthy Hollywood moguls to make movies here. Michigan spent $37.5 million in FY2008-09 to generate $21.1 in private sector spending, and would go on to spend $100.0 million in FY2009-10 to generate $59.5 million. Clearly if money is so tight that we can't afford to help the least among us, then we have zero business giving welfare to the some of the richest people in human history. Fortunately even a broken clock can be right twice a day and our regressive GOP governor dramatically scaled it back since then. Unfortunately we now have a number of empty studios around metro Detroit.


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