Finding purpose in policy

Spike Dearing

Spike Dearing

Have you ever read a bill in its entirety? If you have, congratulations, that can be quite a task. If not, let me explain a bit what it’s like. Bills can be complex. They can be long. They can have all sorts of details and clauses included, but have all the meat confined to one small section that makes all the difference. In a nutshell, there are times when a bill can appear to be written in a foreign language, traversed only by lawyers, bureaucrats, and politicians.

But understanding bills, and thereby understanding the policies they aim to enact, is essential. While you may never see a hard copy of a bill, or hear much about what’s going on in the State House or Senate, what they pass or don’t pass ultimately impacts each one of us. It could be changes to Medicaid, the state income tax, or teacher pensions; regardless of what the topic is, in some way, somehow, the effects of various policy decisions will sift down to every individual. It is because of this inevitability, and the stake that each individual has in their society, that comprehension of policy is so important.

domeNow, most people are busy. Jobs, friends, kids, school … there are a million and one things going on in our lives that keep us moving, keep us working, keep us focused or even distracted. For the majority of us, policy is not one of those things. Luckily for society, there are a select few who have managed to make the interpretation of policy, and then the relaying of information to others in a direct and familiar fashion, their livelihoods. Such people can be found working at the Michigan League for Public Policy.

My own understanding of policy at the beginning of this year was limited. While I had kept up to date on the major legislative debates in Congress, I hadn’t ever done real research into the depths of any piece of policy. From day one with the League though, I was surrounded by professionals. Working here are the types of people who one would consider “policy wonks”. Here are the number crunchers, the data collectors, and the graph creators. The work that happens in this office day in and day out is painstaking, long, at times extremely frustrating, but done entirely with real passion and purpose. Through all that they do, the people at the League are dedicated advocates, policy experts motivated to promote equity and fairness, especially for those who have received the short end of the stick more often than not.

You can imagine that working with individuals of this caliber, I picked up on a few things. And while it is true that I now am more confident in discussing, researching, debating and writing about healthcare and taxes, perhaps more valuable was that through this process I have started to define why good policy is important to me. Policy is a reflection of society. The values of a people are exposed via the policies which they favor. Effective and equitable policy must then be a constantly sought, which requires that policies be backed up by facts and logic, and shaped with a vision towards a more just society. While I still have much to learn about both policy and my own value-based judgements, my experience with the League has put me on the right path.

I leave here having gained a great deal. The people I have met, and lessons I have learned will propel me towards future goals and help me with future endeavors. I have thoroughly enjoyed my time here, from the endless rounds of edits Rachel had me working on, to witnessing Tillie magically transform my excel graphs into something worth looking at, and smack talking this dreary Michigan winter with anyone and everyone who strolled by my desk. To all the staff here, and my fellow intern Alexa, it has been a pleasure. I wish the best to you all, and again, thanks to you all for making this an experience by which I have learned a truly substantial amount.

— Spike Dearing

U.S. House tax plan: Benefit for richest 1 percent in Michigan grows over time

For Immediate Release
November 6, 2017

Contact:
Alex Rossman
arossman@mlpp.org
517.487.5436

LANSING—A new 50-state analysis of the House tax plan released by Congress last week reveals that in Michigan the wealthiest 1 percent of Michiganians will receive the greatest share of the total tax cut in year one and their share would grow through 2027. Further, the value of the tax cut would decline over time for every income group in Michigan except the very richest.

House leadership continues to tout this tax proposal, which will increase the federal deficit by $1.5 trillion over the next decade, as a plan to boost the middle class. But a closer examination of the bill’s provisions reveals that it is laser-focused on tax cuts for the nation’s highest earning households. The wealthiest Michiganians’ share of Michigan’s tax cuts would grow over time due to phase-ins of tax cuts that mostly benefit the rich and the eventual elimination or erosion in value of provisions that benefit low- and middle-income taxpayers. For example, after five years, the bill eliminates a $300 non-child dependent credit that benefits low- and middle-income families while fully repealing the estate tax in year six for the very large estates subject to the tax.

More specifically, the 10-year outlook for the plan reveals that by 2027, the top 1 percent of households in Michigan’s share of the tax cut would increase from 33 percent in 2018 to 47 percent by 2027, for an average cut of $77,380. Middle-income taxpayers’ average tax cut would erode to $590 in 2027 from $730 in 2018, and the poorest 20 percent’s average tax cut would decline from $110 in 2018 to $100 in 2027.

“This bill may cut taxes for some low- and middle-income households, but it also raises taxes on some of these families and many others will see no benefit at all. But let’s be clear: it is still the case that this plan will primarily benefit the rich, across the nation and in Michigan,” said Karen Holcomb-Merrill, Vice President of the Michigan League for Public Policy. “We have sent our elected officials to the nation’s capital to represent us, but what they are saying is just as important as what they are not saying. These tax cuts that mostly benefit top earners will add to the nation’s annual deficits and come at the expense of low- and middle-income families who will likely lose more from cuts to education, healthcare, infrastructure or other public services than they gain from the small cuts they would receive.”

Following are some highlights of how the plan specifically affects Michigan:

  • Richest 1 percent of Michigan taxpayers would receive largest tax cut as a share of income under the House tax proposal in 2018 and 2027.
  • The share of low- and middle-income Michigan taxpayers seeing a tax hike under the House proposal increases between 2018 and 2027.
  • Average tax cuts to top 1 percent of Michigan taxpayers dwarf those going to all other income groups under the House tax proposal in 2018 and 2027.

To read the entire report or get more details about Michigan, go to http://itep.org/housetaxplan.

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The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

A thank you note to Michigan taxpayers

It’s Tax Day! Today is the day that we acknowledge and celebrate all that you do for your state, your community, your neighbors and your families!

I realize that no one likes to pay taxes. The time it takes to find all of your documents and fill out the forms. The frustration over paying at the end of the year if you did not withhold enough. The constant stress over whether you did them right. It is frustrating. But it is also incredibly important. (more…)

Federal balanced budget: Round two

The bill passed by the Michigan Senate that would enter Michigan into a compact for a federal balanced budget amendment is misguided and would create serious challenges for our federal and state economy.

If you’re feeling a little déjà vu, you’re right. Last session, the Legislature passed a joint resolution calling for a federal balanced budget amendment to the United States Constitution. So far nothing has happened with that resolution, and it left a lot of unanswered questions. So with that uncertainty, this alternative approach turns the previous proposal into something more “turnkey;” everything required to giftwrap ratification of this amendment is laid out in the bill, from amendment language, to application and convention rules, to appointment of delegates, to ratification. (more…)

Ask Your Candidates

To address our crumbling roads, lawmakers are offering proposals ranging from increasing the sales tax, creating a wholesale tax on gas, raising vehicle registration fees, or diverting current sales tax revenue to road maintenance. Any type of tax increase, especially to the sales tax, will have a disproportionate effect on individuals earning low wages.

Do you support increased or new revenue to address Michigan’s crumbling road and infrastructure? Would you support increasing the Earned Income Tax Credit or other tax credit to help offset the burden on people earning low wages?

Since the 1970s, the federal Earned Income Tax Credit (EITC) has been considered a significant poverty reduction tool that encourages individuals to work. In 2006, Michigan created its own state-level EITC based on 20% of the federal tax credit. The governor and state lawmakers scaled back the EITC to 6% in 2011.

Would you support restoring the state-level EITC to 20% of the federal tax credit?

3 Michigan is one of only seven states that continue to rely on a flat income tax rather than a graduated income tax. States with graduated income tax structures tax at higher rates as income rises making it a more modern and equitable system.

Would you support reforming Michigan’s income tax structure from a flat income tax rate to a graduated one?

Sales taxes are typically considered to be the most regressive type of tax costing individuals earning low wages a larger proportion of their income compared to wealthier individuals. Expanding the sales tax to apply to services can serve to both increase revenue and make the sales tax less regressive. Even still, the sales tax will remain regressive, which is the reason some states offer sales tax credits to provide relief for individuals who earn the least.

Would you support extending the state’s sale tax to services with a sales tax credit for filers with low wages?

The Michigan Homestead Property Tax Credit (HPTC) is a refundable credit available to eligible Michigan residents who pay high property taxes or rent in relation to their income. In 2011, it was eliminated for many middle-class families, veterans, and seniors whose total household resources were over $50,000 or the taxable value on their homes was over $135,000.

Would you support restoring the HPTC to provide relief to moderate-income taxpayers?

6 Out of 16 states offering families additional heating assistance to qualify for additional food benefits, Michigan was one of four that declined to add dollars to keep the program going when the rules changed. That means an average loss of $76 a month in food benefits for 150,000 families. It will take only $3.1 million to pull down $137 million in extra federal food assistance for these Michigan families.

Do you favor spending $3 million in the ‘heat and eat’ option to draw additional food assistance?

Michigan hasn’t adjusted its child care subsidy eligibility since 2003 even though spending has fallen dramatically. As a result, only working families in poverty or living just above poverty qualify.

Should Michigan expand its child care program back to 150 percent (just under $30,000 for a family of three) of poverty?

8 Two recent federal audits found that Michigan child care centers and homes visited without prior notification were not complying with all state licensing requirements related to the health and safety of children, including required criminal record and protective services checks of caregivers. The auditors concluded that the state has too few child care inspectors (known as child care licensing consultants) to ensure adequate oversight of child care homes and centers, with caseload ratios more than three times the recommended ratio of 1:50.

Would you support the appropriation of state funds to increase the number of child care inspectors and improve the state’s ability to oversee compliance with basic health and safety requirements in state law and policy?

9 Children living in families that must rely temporarily on state income assistance live in increasingly deep poverty as a result of the very low payments provided by the state (a maximum of $492 per month for a family of three through the Family Independence Program). Michigan used to provide a one-time payment to all school-age children from families receiving FIP to ensure that children could at least start the school year with a decent set of clothes. Since 2011, the school clothing allowance has been restricted to only those children living with grandparents or other caretakers who do not receive cash assistance.

Would you support the restoration of a school clothing allowance for all school-age children living in families receiving FIP benefits?

10 Over one-third or 35,000 Michigan third- graders did not demonstrate proficiency in reading in 2013. A House bill would require that third-graders who are not proficient in reading as measured by the state test would be required to repeat the grade at least once and no more than twice. Alternate tests and portfolios may be used to document reading skills but the school superintendent would make the final decision. Critics contend research on retention documents a higher likelihood of drop-out for retained students while supporters of retention decry the negative impact of social promotion.

Would you support the retention of Michigan third-graders who are not reading at grade level?

11 Child poverty in Michigan has escalated by almost 40% over the last 25 years. Almost one of every four children in the state lives in a family with income below the poverty level: $19,000 for a family of three and $24,000 for a family of four. Several policy initiatives to alleviate child poverty have been suggested, such as raising the minimum wage to $10.10—closer to its value in the 1960s and indexing it to inflation, reinstating the state Earned Income Tax Credit to 20% of the federal EITC and raising the child care subsidy and eligibility so parents earning low wages can have access to child care.

Would you support any of these initiatives?

12 Dental cavities remain the No.1 chronic disease in children, despite being preventable with proper dental care. In Michigan, 27% of third-graders have untreated disease; in the Detroit area, the percentage increases to 42%. The Healthy Kids Dental program, a partnership between Delta Dental and the state for Medicaid-eligible children, has greatly increased access to dental care for those covered. The program is available in all counties except Kent, Oakland and Wayne.  All Michigan children should have access to this program. The estimated state investment required is about $22 million.

Would you support statewide expansion of Healthy Kids Dental as a priority?

13 Michigan has been a leader in investments in preschool programs for 4-year-olds, but funding for families with infants and toddlers living in poverty or near poverty has declined—despite scientific evidence that the first three years of life are when children’s brains are growing most rapidly, affecting their lifelong development, learning and achievement.

Would you support additional state funds for proven programs for parents of very young children, including home visiting and parenting programs?

14 Michigan currently has nine coal-fired electricity generating units, with health-related costs associated with emissions from these facilities totaling $1.5 billion annually. These health issues range from asthma to cancer, and heart and lung disease, with people of color and those who are economically vulnerable being the most likely to suffer from these health complications.

Would you support transitioning from coal to clean energy sources, such as wind and solar power to reduce pollution and improve the health of Michiganians?

15 Workers who are laid off, or who work in low-paying jobs, can often improve their financial situation by building skills at a community college or university. However, Michigan’s financial aid grants are not available to workers who have been out of high school more than 10 years. There is discussion in the Legislature of reinstating two financial aid grants that were discontinued several years ago that would help older workers go back to school and get a degree (the Adult Part Time Grant and the Educational Opportunity Grant).

Would you support the reinstatement of the Adult Part Time Grant and the Educational Opportunity Grant to help older workers get the skills they need for jobs that will support their families?