This article originally appeared in the winter 2002 issue of IMPACT!, the quarterly newsletter of the Mackinac Center for Public Policy.

When Mackinac Center for Public Policy President Lawrence Reed heard legislators and pundits talk of postponing or canceling statewide tax cuts scheduled to take effect—and even raising taxes—in response to economic sluggishness in the wake of Sept. 11, he knew the forces of economic freedom had to go on the offensive. 

On Tuesday, Oct. 18, Reed teamed up with a dozen state lawmakers as well as Jim Barrett, president of the Michigan Chamber of Commerce, at a Lansing press conference unveiling a package of six proposals crafted by the Mackinac Center and the Michigan Chamber to help stimulate a sagging Michigan economy.  The proposals were based on data obtained from the State Tax Analysis Modeling Program, a sophisticated econometric model developed for the Mackinac Center by the Boston-based Beacon Hill Institute at Suffolk University.

Reed elaborated on these proposals one week later as he testified before the House Commerce Committee and the Senate Economic Development Committee.  He explained how the proposals, championed by Sen. Bill Schuette, R-Midland, chairman of the Senate Regulatory Affairs Committee, would cut state spending by 5 percent; accelerate scheduled cuts in the state personal income tax; speed up scheduled decreases in the Single Business Tax; reduce the real estate transfer tax; lower the unemployment insurance payroll tax base; and tax telecommunications property on a more equitable basis.

Reed provided the example of New York Mayor Rudy Giuliani who, when he heard some suggest the city's recovery from the Sept.11 attacks required him to rescind more than $17.5 billion in tax cuts, responded that would be "a stupid, idiotic, moronic thing to do."

Rather than send the wrong message to families, workers and job providers, legislators should refuse to give in to the economic naysayers, Reed testified, and speed up the pace of scheduled tax cuts and allow enterprising Michigan citizens to bring the state out of recession. 

Read the full text of Reed's testimony here. 

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