Three of Michigan’s construction unions must believe the state’s business community has been operating as a bunch of generous social welfare agencies. That’s the most reasonable way to understand a $900 million business tax hike proposed by Citizens for Fair Taxes, a joint creation of the Operating Engineers, Michigan Laborers and the Michigan Regional Council of Carpenters and Millwrights.
If the initiated law proposal from the unions receives 252,523 valid signatures, it will be submitted to the Michigan Legislature. If the lawmakers don’t approve it, then it would go to the voters. At issue is whether an 83 percent business tax hike should be used to fund road improvements.
The Big Labor bosses have convinced themselves (and want to convince the public) that a vote for this tax hike will result in “corporations,” rather than “working families,” paying the bills to fix the roads. This assumes profit-seeking firms don’t change prices, wages and other practices when the cost of doing business increases.
Maybe the unions really believe the CEO of Wal-Mart, facing a big hike in the price of milk, bread and eggs, sits back and generously thinks, “Our customers already pay enough for groceries, so we’ll pass these higher bills on to our shareholders and investors instead.”
Perhaps Big Labor thinks the president of Exxon, noticing a big spike in oil prices, is inclined to say “The price at the pump is high enough — we’re not going to charge one penny more!”
And would labor leaders be willing to place a bet that a manufacturing firm, facing high labor costs in one state, will refuse to even consider moving to another region — or even to another nation — where the same work can be done for less?
These fairy tales cut against the typical lefty venom about “corporate greed” and “profits ahead of people” that Big Labor often uses against private employers. Indeed, union bosses thrive on this narrative because they believe it necessary to Hoover up the union dues of the few private-sector members they have left.
But taxes are no different than any other cost. If you think Exxon will make you pay for higher oil prices, then you can’t be deluded about who will pay more if Exxon’s taxes go up. You will.
If the fairy tale about a hyper-generous Exxon isn’t true, then by the same logic the $900 million taken from Michigan businesses is really going to be paid by all of us, in higher prices, lower wages or fewer jobs. If Exxon, Wal-Mart and corporations like them aren’t acting like Santa Claus, then Citizens for Fair Taxes is just lying to us about who is really going to end up paying for the roads.
Of course, if more road funding is needed, then the money must come from somewhere. Setting aside the Citizens for Fair Taxes plot, there are really only two basic camps in Lansing’s road funding debate.
One claims budget cuts alone can be used to acquire the money. They’re implicitly telling taxpayers road funding will take priority over more money for much else state government does.
The other faction argues a gas tax hike on those who use the roads is needed.
One or the other, or a combination of both, is an honest proposal that tells taxpayers where the road money is going to come from. What Citizens for Fair Taxes offers instead is a deceptively shrouded class warfare fantasy about a free lunch. Sign their petition if you want to lie to yourself.
Ken Braun was a legislative aide for a Republican lawmaker in the Michigan House and worked for the Mackinac Center for Public Policy. He has assisted in a start-up effort to encourage employers to provide economic education to employees, and is currently the director of policy for InformationStation.org. His employer is not responsible for what he says here, on Facebook, or Twitter … or in Spartan Stadium on game days.