News Story

Update your memes: Michigan Democrats have embraced corporate welfare

Progress Michigan meme misses the reality in 2023: In Democrat-run Lansing, corporate welfare is as popular as ever

Progress Michigan recently tweeted a Winnie-the-Pooh meme, slamming Michigan Republicans. It read: “Doing what’s best for working folks rather than corporations? What a welcome change.”

What the organization fails to mention is that Democratic leaders have prioritized corporate welfare during their first month of control in Lansing.

The Democratic trifecta that controls the Legislature and executive branch pushed $946 million in new spending in Senate Bill 7. The bill, which includes $450 million in corporate welfare, was passed without hearings or testimony before being sent to Gov. Gretchen Whitmer, who signed it into law.

Whitmer has called for sending even more money to select corporations.

“Gov. Gretchen Whitmer is looking to add $2.3 billion to Michigan’s large-scale business incentives fund over 20 months under a plan that would forestall a pending automatic reduction in the state income tax rate while providing tax breaks to retirees and lower-wage workers,” Crain’s Detroit Business reported Feb. 1.

The governor and her legislative allies, Gongwer News reported Feb. 6, were considering $180 per-tax-filer checks in lieu of the tax cut called for in state law.

As CapCon has previously reported, one way to forestall the automatic tax cut would be to move $800 million to last year’s budget. But that move would require a supermajority vote, and 13 of the Senate’s 18 Republicans could stop it by voting no.

As James Hohman, the Mackinac Center’s director of fiscal policy told CapCon: “This is a time when Republicans could say no and actually get what they want.”

Progress Michigan did not respond to a request for comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

Washington Watch

The IRS’s next target: Tips from waiting tables

Tipped wages are the next target for the tax man

The IRS announced last year that its agents would be on the lookout for $600 sums sent through third-party processors such as CashApp and Venmo. The federal agency announced on Monday that its enforcement efforts would include the “service industry tip reporting program.”

In layman’s terms, the government is coming after tips people get from waiting tables. The IRS couches the plan as a proposal, and has opened the public comment window.

The IRS says the tip reporting program is “designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance.”

Which is to say: The technology used to log employee time at work will now help the government ensure people are paying taxes on their tips.

Here’s how the IRS describes the program in Notice 2023-13:

Throughout his presidency, Joe Biden has claimed he would tax the rich. The New York Post reported Tuesday that Biden’s State of the Union speech would revive a plan to tax billionaires.

Thus far, IRS enforcement efforts under Biden have mostly targeted small sums of money: $600 here, tips from the breakfast diner there. The IRS has begun the decade-long process of hiring 87,000 new agents to boost its enforcement efforts.

An effort to defund those agents passed the U.S. House this year, but the Senate has not taken action.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.