We retired Tax Justice Blog in April 2017. For new content on issues related to tax justice, go to www.justtaxesblog.org
It recently came out that one man—billionaire Manuel Moroun—is almost singlehandedly responsible for getting Proposal 5, (dubbed the “two thirds” tax proposal by supporters), onto Michigan’s November ballot. If enacted, the proposal would require two-thirds approval of each legislative chamber before any tax break or giveaway could be eliminated, or before any tax rate could be raised. The results of such a “supermajority” restriction would be unambiguously bad for Michigan.
Paying for schools, roads, and police would become much more difficult over time as the costs of these services grow and Michigan’s narrow sales tax, flat income tax, and flat gas tax would struggle to keep up. The risk of a downgrade in Michigan’s credit rating would also increase under a supermajority rule, as the range of options for keeping the state’s finances in order would be drastically reduced. Tax reform would become much more difficult, as many loophole-closing proposals could suddenly be blocked by a small minority of legislators. And the ability of Michigan’s government to deal responsibly with unexpected fiscal crises would be greatly reduced.
Unsurprisingly, all of these dangers are of little concern to folks like Stephen Moore at the Wall Street Journal, who’s almost certainly never met a tax cut he didn’t like. But many stakeholders based in Michigan, who would actually have to deal with these consequences, have concluded that a supermajority requirement would do far more harm than good.
Both of the state’s largest business groups—the Chamber of Commerce and Business Leaders for Michigan—have come out against the measure. In noting just how restrictive the measure would be Chamber President Rich Studley quipped that “on some days you couldn’t get a two-thirds vote in the Legislature on what time of day it is.” Even Governor Rick Snyder, whose record on tax policy we’ve criticized a number of times, opposes the supermajority rule on the grounds that it’s “not good public policy” and would have “unintended consequences.” Other opponents include the Senate Majority Leader, AARP Michigan, the Farm Bureau, and the Michigan Municipal League, among many other groups.
And it appears that Michigan voters are getting the message. As the Detroit News reports, polling show that “support for Proposal 5 … plunged 17.5 percentage points, from 68 percent a month ago to 50.5 percent” in mid-September. That is not only the most recent poll, but it’s also relevant because ballot measures usually need at least 60 percent support in September to have much chance of passing in November, since support tends to wane closer to the election.
The Michigan League for Human Services has more details on why a supermajority requirement is a super-bad idea (PDF) for Michigan, and the Center on Budget and Policy Priorities has a report on the issue as well. And at CTJ, we’ve been writing for years about how these rules cripple legislatures and hamstring democracy by undermining the power of elected representatives.
Oh, and there’s a chilling, masters-of-the-universe twist to the story, too. The reason this one man went to all that trouble and expense to buy the proposal a spot on the ballot is not because he’s on some ideological crusade. Rather, he wants to make sure Michigan can never afford to invest in a new bridge to Canada – because it would compete with the one he owns.
Image from Metro Times, Detroit.