Rep. Townsend on Republican Tax Cuts for Corporations: It's Not Working

Jobless rate increases to 9 percent in August, has been rising since April
Friday, September 20, 2013

LANSING — Rep. Jim Townsend (D-Royal Oak) said that Michigan’s rising unemployment rate demonstrates that the massive corporate tax breaks created by Gov. Rick Snyder and legislative Republicans are failing Michiganders and must be repealed. In 2011, shortly after taking control of the Legislature and governor’s office, Republicans instituted a $1.8 billion tax break for major corporations, which they promised would stimulate job growth in the state. The tax breaks were paid for by increasing taxes on middle-class families and seniors.

“Republicans promised that getting rid of taxes on most Michigan businesses would result in booming job creation, but the results are in: It’s not working,” Townsend said. “The tax breaks have been in effect for more than a year and our unemployment rate is virtually unchanged. Michigan families can no longer afford to pay billions more in taxes to pay for corporate give-away gimmicks that don’t work.”

Michigan’s seasonally adjusted unemployment in Michigan hit 9 percent in August, up from 8.4 percent in April. According to the Michigan Department of Technology, Management and Budget, the number of Michiganders looking for work has also increased to 425,000, up 8.7 percent from April.

Nationally, the unemployment rate stood at 7.3 percent last month. At 8.8 percent, Michigan was tied with Georgia for the fifth-highest unemployment rate in the nation in July, the last month for which figures were available for other states.

“Republicans promised us their corporate tax breaks would lead to jobs in Michigan, but that promise has been broken,” Townsend said. “Michigan families can no longer afford to foot the bill for this experiment. Moms and dads and students and seniors need tax fairness now.”

House Democrats have introduced a number of measures to restore tax fairness, including a repeal of the new tax on senior retirement income, a restoration of the Homestead Property Tax Credit and Earned Income Tax Credit and the reinstatement of the $600 per-child tax credit. All of these measures have stalled because legislative Republican leadership refuses to allow them to move forward.

“The evidence is in: large-scale tax breaks for corporations do not create jobs,” Townsend said. “It’s time for Republicans to do the right thing and get rid of the tax burden they placed on the backs of Michigan’s families and seniors.”