Six views on taxes

Psssst….

Did you hear the news from across Lake Michigan?

Illinois’ new governor wants to raise taxes. Income taxes. By FIFTY percent. Yeah, we gasped, too, and then we saw he wants to make a few government reforms. Like larger health care co-pays and smaller pensions for state workers.

Seems Michigan’s not the only Midwest state with big-time budget trouble, a phenomenon which underscores the potential in building a simple, fair, sustainable, transparent, and competitive tax code for Michigan’s future, Phil Power writes this week.

Governor Jennifer Granholm this week said she’d support a graduated income tax — an idea argued for by economists like MSU’s Charley Ballard.

Another Lansing thinker, PR guru Dave Waymire, also smiles on a progressive income tax with these thoughts posted on the Center for Michigan’s message boards… Given the recent talk about a progressive income tax replacing business taxes in Michigan, it’s worth noting that eight of the ten states that scored “best” (had the lowest business tax burden as a percentage of profits in the report) have a progressive income tax. In other words, other states seem to find the best way to lower business taxes is to put in place a progressive income tax. Second, it’s also worth nothing that seven of the 10 states that scored “best” have lower per capita income than Michigan. That raises an interesting question: Are lower business taxes really the ticket to higher prosperity? It’s important to cast that net widely — just comparing the MBT (or old SBT) to a state that uses 10 business taxes, one of which is a business income tax, is not going to cut it. But do we really want to emulate Indiana — a low tax, low per capita income, high unemployment state — or Minnesota, a high per cap income, lower unemployment and yes, slightly higher tax state?

But the authors of the Anderson study have another perspective. Anderson staffer Alex Rosaen weighs in this week with a guest column, arguing that, since we can’t change Michigan’s weather, a best-in-the-nation business tax climate is one of our best options for differentiation.

At the Center, we continue to promote the idea of a cage match between Charley Ballard and business leaders who frown on a graduated income tax as much as they frown on the current business tax… If we lock the two sides in a room for a couple days, they’d either kill each other or work out a solution.