ICYMI: Michiganders may have to pay back pandemic benefits, how Dan Gilbert avoids paying taxes, and the best of the rest of the news

Jul 14, 2021 at 1:00 am
click to enlarge Dan Gilbert. - Erik Drost, Flickr Creative Commons
Erik Drost, Flickr Creative Commons
Dan Gilbert.

Some of the 648,000 Michigan residents who collected Pandemic Unemployment Assistance benefits during the pandemic might have to pay them back, according to letters mailed out by the Michigan Unemployment Insurance Agency last month — or a whopping 19% of the 3.35 million claimants who received the funds since March 15, 2020. Apparently the SNAFU happened when, early in the pandemic, Michigan added its own guidelines for claimants, which were ultimately rejected by the U.S. Department of Labor. (This is on top of possibly millions of dollars of fraudulent claims, which has seen 13 people charged for abusing the system, including a UIA employee and contractor.) "The Unemployment Insurance Agency is a mess," Rep. Steve Johnson, a Republican, told The Detroit News. "If the state made the mistake, the people shouldn’t have to pay for it. The state should have to pay for it.” Indeed, the state is looking into waiving the clawback on a case-by-case basis. It’s not all bad news for Michigan’s unemployed, too: The Dept. of Labor also added three criteria that might make some residents who were previously denied aid now eligible. Michigan has paid about $36.7 billion in unemployment benefits to about 3.35 million people since the pandemic began, which includes $300 in federal aid biweekly and between $160 and $362 in biweekly state aid through September.

The emergency powers Governor Gretchen Whitmer used during the pandemic are likely headed to the chopping block. Last week, the Michigan Supreme Court ruled that the Board of State Canvassers can certify an initiative to repeal the Emergency Powers of Governor Act of 1945, which Whitmer used to fight the spread of COVID-19 in Michigan until the Supreme Court declared the law unconstitutional. The initiative was led by the group Unlock Michigan, which had been accused of using unethical practices to get signatures for the petition, but the state Bureau of Elections determined the effort got more than 460,000 valid signatures, far more than the 340,000 required. This means the Republican-controlled legislature can likely move to repeal the law, which can’t be vetoed by Big Gretch. Once the Supreme Court struck down the emergency powers, however, Whitmer was able to continue to mirror many of her executive orders issued under it using the Public Health Code’s epidemic orders, which Unlock Michigan has set its sights on dismantling next.

Even though the Cleveland Cavaliers won their first-ever NBA championship in 2016, owner and local billionaire Dan Gilbert says the team operated at a loss, and used that claim to lower his taxable income by an eye-popping $443 million from 2005 to 2018. That’s according to a recent report from ProPublica, which looked into how wealthy major sports team owners use amortization, a term that refers to depreciating assets, to avoid paying taxes by claiming the teams are operating at a loss. This is odd because, as the report points out, sports franchises are “essentially monopolies,” and “a license to print money” — yet billionaire owners can use amortization to pay a lower tax rate than, say, the low-wage employees who work the concession stands at the stadiums. The report is the latest in a series on how the super-rich use the country’s tax codes to avoid paying income taxes that ProPublica says was possible thanks to a “trove” of IRS documents it received, though the nonprofit outlet won’t say how it obtained them, citing the public’s right to know. (As if to underscore the point, billionaire Richard Branson flew into space in his own private rocket over the weekend, becoming the first “space baron” of the new private-sector space race, beating fellow billionaires Elon Musk and Jeff Bezos to the punch.)

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