Michigan tax plan could be immune from voter backlash

Michigan Governor Rick Snyder’s plan to cut taxes on businesses while simultaneously raising taxes on residents – for instance in pension plans – contains a $100 appropriation that would free it from repeal by public vote. This is because of the state constitution, upheld by the Supreme Court, which states that any law which contains as little as $1 of expenditure is free from referendums.

The 183 page tax overhaul bill would replace the Michigan Business Tax with a flat 6% corporate tax rate, while also slashing tax exemptions across the board. These include exemptions for pension plans, the Earned Income Tax Credit for low income workers, and the recently-hyped refundable tax credit for movies produced in within the state.

Michigan Democrats have sworn to challenge the law, on grounds that the appropriations in the bill are designed to usurp the democratic process and take the future of Michigan out of the hands of the state citizens.

The full story can be viewed here.

The recent actions being taken across the country to reduce public union bargaining abilities and restructure benefit plans is as inflammatory as it is intriguing.

Since the Wisconsin Democrats fled three weeks ago, the state of affairs has been inarguably terse; having tens of thousands of protestors flown in from around the country is a difficult enough situation when you consider that these people have to eat and sleep somewhere. The logistics alone are stressful, before adding in the anger that has been at elevated levels since this freeze began.

However, now that a resolution appears to be in sight, it seems like this highly infuriating subject is a good point on which to focus my efforts, to address a generally absurd claim I’ve been hearing.

The argument goes something like this:

This is the first step to returning to 1920 labor conditions. Without the unions and their ability to collectively bargain, there is no one protecting the working class.

Ignoring the fact that collective bargaining for pay raises has little to nothing to do with working conditions (and public unions haven’t completely lost the right to strike without consequence), here’s an incomplete list of United States Labor Laws in no particular order:

1. Fair Labor Standards Act of 1938 (amended to cover government employees in 1974)
2. Employee Retirement Income Security Act of 1974
3. Family and Medical Leave Act of 1993
4. Occupational Safety and Health Act of 1970
5. Civil Rights Act of 1964
6. Civil Rights Act of 1991
7. Age Discrimination in Employment Act of 1967
8. Americans with Disabilities Act of 1990
9. Immigration Reform and Control Act of 1986

If you’d like to see the behemoth that is US Labor Law, an open indication that this is not the 1920’s, then by all means, check out the entire list of them here.

What is generally apparent is that the rights of U.S. workers are guaranteed considerably beyond the overly simplified illustration of organized labor constantly fighting off the attempts of some blurry menace, Big Business, to destroy them.

Unfortunately, while the entirety of this issue was entertaining to watch, it brought only instability and, even after this outcome, no relief to the three groups that need it the most; government entities, business organizations, and taxpayers.

Wisconsin is still broke, desperately hoping to hold even. And for the moment taxpayers and their businesses are still paying exactly what they were before now.

But, perhaps the debt of public entities will now improve going forward.

8:46AM Transmontaigne Partners reports Q4 revenue increased 10% y/y to $39.5 mln, Thomson Reuters consensus $37.7 mln; net earnings per limited partner unit decreased to $0.24 per unit loss from $0.53 in earnings, may not be comparable to $0.57 consensus (TLP) 38.74 :

I am experiencing a bloodletting today, with my portfolio down 3.6% thus far. Thank you oh so much, TLP and NRP, for crimping me at the neck. I do not appreciate it; oh no, not one bit.

Why this is happening, I cannot say, unless it is simply the market succumbing to selling pressure and leading us lower. Coal and transportation have had a terrific year, so this could just be money rotating out. It could also be people getting ready for skyrocketing oil prices to crush domestic demand.

Pray it isn’t the latter.

In order to hedge a little further, I shorted KOL, the coal ETF, for $45.75 average cost. This should directly relax my position in NRP. NRP collects coal royalties, the determining factor of which I am now betting against.

I’m not a fan of the market right now. Too much shit going on. I’m glad I sold out of as much stuff as I did. This would have been nasty if it happened a few months ago.

Foreclosure filings dropped 27% – the biggest drop recorded yet.

Much of that decrease is attributed to the month of February, as February foreclosure filings were 14% lower than a month earlier.

However, not all of that is necessarily from improving home markets.

“Allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets,” RealtyTrac CEO James Saccacio said. “The industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures.”

For the month, there were still over 225,000 foreclosures filed.

(Compliments to Le Fly)

Minicipal bond issuance is looking to have a terrible year, as new issues are at their lowest level since the turn of the millennium. Since March 4, muni issuers have only managed to sell around $31.5 billion in debt.

In the tumultuous early days of 2000, $39.1 billion in muni bonds were sold. The lack of sales spells continued austerity as pressure mounts on state and local governments.

The decline has been in part attributed to the end of the Build America Bond Program, which helped to subsidize municipal borrowing activity. However, such a powerful drop off has even some of those expecting decreased activity in a state of disbelief.

The question that should be on the minds of market participants: is this market drawdown because municipalities aren’t issuing new debt, or because no one wants to buy it?

In conjunction with the powerful political grassroots movements calling for spending reform across the country, the inability of municipalities to restructure their debt may give further ammunition to those calling for government austerity.

Which has everyone else wondering, what will that do to national asset prices?