Fieger, Engler propose tax cuts

Taxes are the one thing everyone loves to hate, and both gubernatorial candidates have proposals on the table to put tax dollars back into citizens' pocketbooks.

Republican Gov. John Engler said one of the foremost priorities for his third term is to lower the state income tax from 4.4 to 3.9 percent. He said his strong record of lowering Michigan's tax burden has put the state in a position of economic strength.

"In the '70s and '80s there were a lot of times when we simply weren't very attractive to companies who were looking for a place to locate," Engler said. "I think we reversed that. Last year, we were No. 1 in the country in new business and plant expansion."

Engler's tax proposal would save the average taxpayer $147 during the next five years.

Democratic challenger Geoffrey Fieger's broad tax cut proposals include reducing or eliminating Michigan's single business tax. The single business tax is Michigan's primary corporate tax. Fieger also said he wants to cut Michigan's sales and gasoline taxes.

"I believe that more taxes mean less freedom," Fieger said. "I believe that unless it can be shown to affect the health, safety and welfare of people in the state of Michigan the tax is wrong.

"My philosophy is where I can I will attempt to reduce taxes, but I will attempt to adequately maintain funding in appropriate areas."

These tax cut proposals are sweeping, but Fieger, an attorney, did not detail how the state can still function with such drastic cuts in tax revenue. He said he will use his experience running a business to make government more efficient.

"I think there's incredible waste, corruption and mismanagement in state government," Fieger said. "We can save hundreds of millions, if not billions of dollars."

Fieger is scheduled to release a more detailed tax proposal tomorrow.

Across the state, legislators and policy experts have mixed opinions about whether a tax cut is advisable.

"The economy is so uncertain and when the (national) economy slows down, the Michigan economy usually comes to a halt," said State Sen. Alma Wheeler-Smith (D-Salem Twn.). "This is not the time to go blithely into a (large) tax reduction."

Engler's plan would decrease state revenue by $2.6 billion during 5 years. The tax reduction would come from the state's General Fund, which funds education and corrections.

Betsy DeVos, chair of Michigan Republican Party, said she has seen no sign of an economic slowdown in the state. She added that Engler has given the state the fiscal strength needed to support significant tax reductions.

"John Engler has taken a billion-and-a-half-dollar deficit and has transformed it into a rainy day fund of hundreds of millions of dollars," said DeVos, who is married to the president of Amway Corporation. "One of the great challenges we face at Amway is an unemployment rate so low, we cannot find good, qualified people to hire."

Even if the economy was strong, Smith said Engler's tax proposal would not be a move in the right direction. She said the governor's income tax decrease will disproportionally benefit the upper class and will lower Michigan citizens' quality of life.

"We're talking about cutting $2.6 billion that can be used for higher ed," Smith said. "If we (allocated the money to higher education), we'd have businesses flocking to the state for the skilled labor force."

Joseph Lehman, spokesperson for the Mackinac Center for Public Policy in Midland, Mich, said the Center gave Engler a B or a B+ grade for his tax policies. He said the new income tax proposal is a sound proposal that will put money back in the hands of taxpayers.

"When (Engler began) Michigan was one of the higher per capita tax states in the nation and now it's near the middle," Lehman said. "Governor Engler's tax proposals have been in the right direction but there's more to be done."

"Michigan is certainly more competitive now than it was when the governor took office."

Lehman said he cannot comment on Fieger's stance on taxes until he hears a more specific proposal.

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