COLUMN: TISDEL TALK - Taxes and Why Lower is Better
By Rochester Area State Rep. Mark Tisdel
If you’ve read or watched the news lately, you’ve probably heard about tax cut and tax credit legislation put forward by Republicans and Democrats in the new Michigan Legislature. It is positive news, indeed, that both parties are talking about relief for Michiganders, but there are critical differences between the two proposals.
In the House, Republicans have put forward a simple plan to increase tax relief for Michigan’s seniors. Under our plan, working and retired seniors 67 years and up could deduct $40,000 of all income — or $80,000 for a couple. Seniors 62 to 66 years old could individually deduct $20,000 or jointly deduct $40,000 of retirement income. Democrats have an overly complicated, yet narrowly targeted, proposal that takes years to implement, gives favorable treatment to public pensions over other kinds of retirement income, and provides nothing for working seniors. Our Republican plan would take full effect for tax year 2023 and treat working and retired seniors fairly.
Our Republican plan will also increase the state’s Earned Income Tax Credit (EITC), a benefit earned by Michigan workers. Our proposal would raise this credit from 6% of the federal EITC to 20%. The average eligible worker would see an increase of several hundred dollars and receive a combined state and federal credit of about $3,000. Our plan would boost the EITC starting in the 2022 tax year, so workers would receive this credit right away, while Democrats would delay relief until workers file their tax returns next year.
I have long been a proponent of tax relief. During my first term in the Legislature — led by Republicans in both chambers — I voted for three broad tax cut plans for the people of our state. That includes voting twice to reduce the income tax rate for everyone; twice to exempt more retirement income from taxation; twice to grant a $500 per-child tax credit for families; once to increase the state’s EITC; and once to pause the state gas tax and deliver immediate relief. I voted to reduce Michigan’s tax burden, and three times Gov. Whitmer vetoed the bipartisan legislation.
So, why are tax cuts so important to Republicans? The answer is very simple: the most efficient way to move money through the economy, resulting in the greatest impact, is allowing people to spend their own money on themselves. About half a century ago, when I was still in college, Milton Friedman won a Nobel Prize in economics for describing the effects of how money is moved. His “Four Ways to Spend Money” should be a staple of economics instruction.
The most efficient way to spend money is for people to spend their own money on themselves. When people spend their own money, there is an interest in thrift; they get to keep the savings. There is also an interest in quality; since they’ll be using the goods and services themselves, people want to get their money’s worth.
Least efficient is to spend someone else’s money on someone else; both thrift and quality go out the window. This is how government spending operates. It’s easy to spend — and keep spending — someone else’s money. Projects regularly come in over budget, behind schedule, and riddled with quality issues.
As your state representative, I’m working to give you a voice in how your money is spent, so government serves you better and more efficiently. I’m also working to let you keep more of your money by providing relief that is both fair and immediate. Nothing has a greater impact on our economy than allowing people to spend or invest the money they already own for themselves and their families.
About State Representative Mark Tisdel
State Rep. Mark Tisdel, of Rochester Hills, represents Greater Rochester in the Michigan House of Representatives. The 55th House District, which Tisdel represents, includes the cities of Rochester and Rochester Hills and part of Oakland Township.
He serves on the House Tax Policy Committee.
Representative Mark Tisdel is one of 110 Members of The Michigan House of Representatives who are elected by the qualified electors of districts having approximately 77,000 to 91,000 residents.
Representatives are elected in even-numbered years to 2-year terms. Legislative districts are drawn on the basis of population figures through the federal decennial census.
February 13, 2023, from the office of 55th District Michigan House Representative Mark A. Tisdel and Rochester.Life