The Legislature did not meet this week. Because there were no votes, this report instead contains several newly introduced bills of interest.

Senate Bill 1531 (Impose new regulations on natural gas “fracking” extraction)
Introduced by Sen. Liz Brater (D) on September 29, 2010, to impose groundwater discharge permit regulations, fees, permit requirements, etc. on the use of "hydraulic fracturing" to extract natural gas. This new technology reportedly has more than doubled the amount of known domestic gas reserves. See also the Brater amendment to Senate Bill 1177, defeated on a party-line vote, which would have banned “fracking” altogether in Michigan. Referred to committee, no further action at this time.

Senate Bill 1497 (Revise “driver responsibility fees”)
Introduced by Sen. Deborah Cherry (D) on September 15, 2010, to eliminate the provision that suspends a person’s drivers license for nonpayment of “driver responsibility fees” (“bad driver tax”) that are assessed for various violations and must be paid for two consecutive years. These very expensive fees were originally adopted in 2003 to raise revenue so as avoid spending cuts and reforms. Referred to committee, no further action at this time.

Senate Bill 1488 (Extend submerged log removal permits)
Extend submerged log removal permits to extend the expiration date of Great Lakes submerged log removal permits for up to 10 years. Currently all permits expire on January 1, 2013. Referred to committee, no further action at this time.

Senate Bill 1505 (Ban labeling 100-mile produce “locally grown”)
Introduced by Sen. Gerald Van Woerkom (R) on September 22, 2010, to ban selling or advertising a farm product designated as “locally” grown or produced unless it is grown or produced within 100 miles of the sale location, with violations subject to a $500 fine. Referred to committee, no further action at this time.

House Bill 6428 (Increase improper fetal remains disposal penalties)
Introduced by Rep. Rick Jones (R) on September 9, 2010, to authorize up to three years in prison and a $5,000 fine for not disposing of fetal remains according to the requirements specified in state statute. Referred to committee, no further action at this time.

House Bill 6443 (Establish that no tax be imposed for well water withdrawal)
Introduced by Rep. Mary Valentine (D) on September 15, 2010, to prohibit the imposition of a tax on the use of well water. See also House Bill 5319, sponsored and co-sponsored by Reps. Scripps, Valentine, Geiss, Warren, Wheeler-Smith, and Bledsoe, which potentially opens the door to some kind of fees by repealing the “riparian rights” legal doctrine that gives a property owner a right to the reasonable use of groundwater, to the extent this does not diminish the ability of neighbors to obtain water. Instead, an owner would have to get permission from the state to use well water, which is called a “public trust” legal doctrine. Both bills referred to committee, no further action at this time.

House Bill 6445 (Ban using lottery ad money to sponsor local events)
Introduced by Rep. Gail Haines (R) on September 15, 2010, to prohibit state lottery marketing funds from being used to sponsor particular events. The use of these funds to pay for local fireworks displays has been criticized due to the potential that the practice could be used for political purposes. Referred to committee, no further action at this time.

House Bill 6450 (Revise parole standards)
Introduced by Rep. Alma Smith (D) on September 16, 2010, to require that parole be granted to prisoners who have served their minimum time if the person has at least an “average probability” under a "validated risk assessment instrument" of not being a risk to public safety and meeting other criteria specified in statute, subject to some restrictions and exceptions. Referred to committee, no further action at this time.

House Bill 6463 (Dismantle MEA’s school insurance sale device)
Introduced by Rep. Larry DeShazor (R) on September 21, 2010, to require school districts to be the actual insurance “policyholder” for health benefits provided for employees. This would dismantle the device by which the MEA school employee union’s insurance subsidiary (MESSA) sells coverage to school districts. Referred to committee, no further action at this time.

The New York Times claims that President Barack Obama has done the "tax cut nobody heard of."  The story states Obama cut American's income taxes by $116 billion through the stimulus bill.

Anthony Randazzo, director of economic research for the Reason Foundation, gave his thoughts on the story:

There is partial truth to the story. What the ARRA included was a tax credit (different from a tax cut) of $400 for individuals and $800 for couples (phased out at $75,000 and $150,000 earned). This credit was commonly known as "making work pay," which was a signature promise of the Obama campaign. A credit is different from a cut in that it is cash given to you by the IRS, as opposed to a reduction in what you owe. 

The NY Times article incorrectly characterizes the Making Work Pay credit as a tax cut similar to the reduction in tax rates passed in 2001 and 2003. The former was a specific dollar amount given to taxpayers, even if they didn't pay $400 or $800 in taxes. The later was a reduction in the rates for each tax bracket, creating a lower baseline for what the IRS was taking each year.

However, the confusion is understandable in that the default option for the credit wasn't offered as a lump sum, much like the Bush tax credit of 2008. Instead, the default was to change people's withholding preferences on their W-4. So the credit was given in 12 month or 24 bi-monthly installments. However, if taxpayers wanted, they could receive the check as a lump sum, especially if they were already requesting $0 withholding (as I do).

The Making Work Pay credit will expire next year, true. But it's a redistributive credit that is not in line with the principles of sound fiscal tax policy. Just because withholdings were changed doesn't mean taxes were cut. The credit was still a direct redirection of wealth from taxpayers who pay taxes to taxpayers who don't contribute to the tax base. It may sound like semantics, but the negative effect of spending on the credit is very real in the aggregate.