Businesses concerned about their future tax liabilities and schools trying to figure out their budgets be damned.
Michigan’s budget, or lack thereof, remains a murky mess of continuations, potential future supplements, and ideas passed in one chamber or another, but not by both and not with a governor’s signature.
The House passed $160 million or so in tax increases this week, the Senate Majority Leader said those were dead on arrival. Then the state’s bean counters suggested Thursday that $160 million in new taxes would basically be a wash because tax revenues in recent months came in $130 million lower than expected. Then the Senate proposed it’s own mix of tax increases and tax breaks for business and then we had to stop watching and actually push the “send” button on this week’s newsletter.
You’re better off handicapping a harness horse race than picking how Lansing will finally decide the overdue budget. But this much is completely clear for future years…
The tax system is in dire need of overhaul. It’s not reflecting the new economy. It’s not sustainable, fair, or understandable in its current form. And it does not provide a reliable enough revenue stream to predictably budget for public service needs of all types (education, higher ed, revenue sharing, social services, environmental protection… take your pick…)
On November 17, the Center for Michigan will pull together budget and tax experts, as well as public service providers, to prod the discussion over tax reform in Michigan. A full agenda and speaker list will be announced very soon.
TOTAL PER CAPITA INCOME: $39,273 (28th)
OVERALL STATE BUSINESS TAX CLIMATE: 20th
INDIVIDUAL INCOME TAX INDEX: 15th (the higher the score, the more favorable the climate for for business)
SALES TAX INDEX: 11th (the higher the score, the more favorabel the climate is for business)
PROPERTY TAX INDEX: 25th
STATE TAX COLLECTIONS PER CAPITA: 30th
STATE REVENUES PER CAPITA: 28th
STATE SPENDING PER CAPITA: 27th
TOTAL STATE & LOCAL TAX BURDEN PER CAPITA: 26th
STATE & LOCAL TAX BURDEN AS PERCENTAGE OF STATE INCOME: 9.4% (27th)
STATE INDIVIDUAL INCOME TAX COLLECTIONS PER CAPITA: 37th
STATE CORPORATE INCOME TAX COLLECTIONS PER CAPITA: 19th
STATE GASOLINE TAX RATES: 13th highest
STATE CIGARETTE TAX RATES: 9th highest
STATE LIQUOR TAX RATES: 6th
STATE WINE TAX RATES: 30th
STATE BEER TAX RATES: 21st
STATE LOTTERY SALES PER CAPITA: $233 (14th)
7 Comments
A great start. I’d just note that some of these figures differ somewhat, either way, from Census data that I believe tends to be more reliable and accepted by economists than the “updated” Tax Foundation numbers, which sometimes include assumptions.
A good debate starts from a level playing field. I’d recommend we use the most recent Census data available, where possible, instead of other sources.
And, of course, these numbers omit what is proving to be the single more reliable predictor of personal income and prosperity for a state: Education Attainment. There is a very close correlation between a state’s ranking on Education Attainment and per capita income.
It’s worth noting that the Foundation took the figures from the Census.
The main problem I know is that there are people in this state who believe that they have a right to another person’s income/property/wealth. So for The Center for Michigan to ..”pull together..experts” is laughable, that group might as well re-name it self, “The Center for High Taxes”, period. T.C.F.M. was created to be an advocate for politicians confiscating our income/property/wealth and redistributing to themselves, their supporters, the parasites and family members. T.C.F.M. also supports a bigger and more intrusive state government. And finally, the old saying is true, the power to tax equals the power to oppress.
The main problem I know is that people with a lot of money believe they have no obligation to the community and infrastructure which made their wealth possible. Nobody (except criminals) makes a lot of money without the support of good laws, good eduction, good infrastructure, and a healthy community. To turn around and deny the community’s right for return on its own investment is what is tearing Michigan down now.
Those who believe lowering taxes solves all problems have a naive and unrealistic view. Why would a responsible business, interested in its own long-term prosperity and that of its employees, want to invest in a state whose citizens are unwilling to invest in their own community? Whose roads and bridges are falling apart? Whose schools are going from mediocre to poor?
Mr. Krieg is right on about investing in ourselves. The tax structure as it is has entirely too many tax credits working to redistribute the wages of Michigan’s workers. The ones who pay the least get the most in credits and reap the most benefits from the state.
Our tax structure is broken. I would recommend:
1. institute a progressive income tax
2. eliminate all business taxes other than property.
3. prohibit all tax incentives to business unless the local property taxing authority is made whole.
4. lower the sales tax to 5% but extend it to ALL services.
just my most humble opinion,
ron overton
Just a side note before I get started; I saw Jennifer Granholm with Steve Wynn, the CEO of Wynn Resorts. He employees more than 20,000 people, she is the Governor of MI, with an unemployment rate of over 15%, that means over half a million people out of work. In my opinion ,watching them debate was the best “illustration of statism….versus capitalism”, she was clueless. Steve blamed Obama and other politicians,and rightly so, for this country’s economic woe’s, and she praised Obama (government/politicians) for his spending. Need I say more. Now for my response to liberals who worship the nanny state. Since you all need politicians to take care of you, how about changing your birth records to show who your real parents are, the government.