Michigan Gov. Snyder Cuts Aid For Low-Income Families After Slashing Taxes On Corporations

From Think Progress:

Gov. Rick Snyder is expected to sign a bill into law capping how long state residents can receive welfare assistance.

The new 48-month limit is expected to result in more than 11,000 people losing benefits at the start of the fiscal year, Oct. 1. The new limit — bringing the cap down from the federal 60-month limit — is projected to save $60 million.

As the Center for Budget and Policy Priorities’ Liz Schott points out, the $60 million in cuts come after Snyder signed into law a $1.7 billion tax cut for corporations. That’s about $30 in corporate tax cuts for every dollar saved in welfare benefit cuts.


    1. Why would it? What people often don’t seem to get, is that companies don’t hire because they have money. They have money because they DON’T hire. No company ever hires just for giggles. They will only ever hire someone if they think it will make them more money in the end. So if they are profitable, and their profits are increasing, which implies that they can meet demand with their current capacity, why would they ever want to hire anyone?

      Using tax incentives to lure companies in doesn’t work either. It doesn’t create jobs at all; at best, it may move them from one location to another. The economy of the US is very interdependent, so that moving jobs from one State to another is not likely to help the economies of either State for very long. Only if the US was able to attract jobs from Canada or overseas would there be a net increase in economic activity as a result of tax incentives.

      But: why would any corporation move jobs from Canada, where their overall costs are far lower (no need to provide health insurance, lower salaries, as well as lower corporate taxes in many cases)? Very few States are in a position to offer companies anywhere near enough to lure them from Canada. So it would have to be from overseas. And that is also highly unlikely for a host of other reasons.

      So tax incentives are really nothing but a scheme for one State to steal jobs from another State. The resulting disruption to the economy of the losing state, as well as the loss of revenue from the tax scheme itself, will ensure that both lose in the long term. Only the company which takes the money for the short period it’s offered wins anything.

      1. Even if taxes were the only thing keeping these poor corporations from hiring, long term welfare recipients seem unlikely to be their first choice. The reserve army of the unemployed is pretty huge at the moment, and they can afford to be picky.

    2. More than likely it’ll go to their CEO’s and lobying government to pay even less tax

      “Study: Top CEOs earned more than companies paid in tax”

      •EBay, whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes.

      •Boeing, which paid CEO Jim McNerney $13.8 million, sent in $13 million in federal income taxes and spent $20.8 million on lobbying and campaign spending.

      •General Electric, where CEO Jeff Immelt earned $15.2 million in 2010, while the company got a $3.3 billion federal refund and invested $41.8 million in its own lobbying and political campaigns.

    1. Yes, there was an article in the NYT a few month’s back about how some Wall Street “expert” gave a speech saying the real problem in the U.S was that the middle class in the U.S. make too much money. (Translation: we need to outsource as many jobs as possible to third world countries so that wages fall in the U.S.) There are a lot of Ayn Rand devotees in the U.S. who think that the rich earn their money without help from anyone else — as if by magic — and therefore, paying taxes is “stealing” from them. They don’t think about the fact that tax money that goes into building roads and ports and railroads, water and sewage systems, education to train their workforce, health care (because some — like Walmart — don’t provide insurance), police and fire. All of which help their companies — or the investments in those companies — run. Not to mention that average incomes (adjusted for inflation) for the middle class haven’t risen in the past 30 years. AND the many tax SUBSIDIES these companies get from the rest of us to run.

  1. Maybe the corporate tax cuts will enable some of these politicians to fire some of the people working on other social programing (like education). The middle class also uses social assistance, darling.

  2. Maybe the corporate tax cuts will enable some unemployed people to get thrown out of their homes, run out of benefits, and lose their kids. This sounds like that old scheme we’ve seen before to encourage businesses to move into the state (if it happens, it will be temporary), and force poor people to move to another state (where things probably won’t be any better).

    1. I’ve seen that happen plenty of times. The corporation sets up shop and then vanishes as soon as the tax breaks end.
      As for “move where the jobs are?” Pfft. I sold, gave away or abandoned everything I had and spent $7,000 to Uhaul it to the other side of the country — where the jobs were. After 5 years of paying off that $7,000 move? I got laid off that very month.
      As long as we still have bread and circuses, we’ll never resort to pitchforks and torches.
      The worst part is knowing I’ll never fulfill my Mom’s dream for me of having a better, more prosperous life than she’s had despite her many years of struggling.

  3. This is what the people of Michigan voted for. Its what the people of Wisconsin voted for, and Indiana and Ohio. Dim reflections of the anti-human pro-business demolition of society seen in the South & West. These voters WANT to live in third world conditions. They are not bright enough to see that this race to the bottom is a no win for them. Those who voted this way deserve the devastation they have sewn. I only wish they were not dragging the rest of us down with them.

    1. I used to live in Michigan, and I live in the Midwest now. I don’t think people voted for these people. They got elected because the liberals stayed home and allowed the crazy conservatives to take over the election. Which is a lesson to all of us. We may be disappointed in our liberal politicians, but we need to still haul our butts to the voting booth and vote for them — because we could get far worse. (But then we need to take the time between elections to work on a new third party that really represents the middle class, which I think the Dems have abandoned.)

  4. As a social worker working with mentally unstable adults I am super excited to get the opportunity to deal with the madness which is about to ensue here. The dept. of human services (dhs) has already begun sending letters to those about to lose their assistance. The initial termination of 11000-12000 recipients are getting 6 weeks notice… At least there is an abundance of jobs to be had, which must be the reason the state is directing said folks to the local Work First programs.

Comments are closed.