|October 6th, 2007, 01:05 PM||#1|
Join Date: 03-10-07
Location: kalamazoo, mi
editorial from the wsj about michigan
Subject: WSJ Article - Michigan Taxes
Wall Street Journal (Editorial)
Hail to the Taxers
October 2, 2007
Actor Jeff Daniels makes a cool pitchman in those national TV spots
inviting business to Michigan, but soon he may have to start pitching
inside the state. At about 2 a.m. Monday, a handful of Republicans in
the Legislature broke days of gridlock and handed Democratic Governor
Jennifer Granholm the $1.48 billion tax increase she has been
The state's personal income tax will rise to 4.35% from 3.9%, and the
rest of the revenue grab will come from a new 6% sales tax on business
services. Already 14th in tax burden among the 50 states, according to
the Tax Foundation, Michigan is now headed up in the rankings.
The Michigan Chamber of Commerce estimates that two-thirds of the $750
million in new sales tax revenue will apply to business transactions
that are tax exempt in most states to avoid a compounding effect that
raises costs to final consumers. The tax is especially unfair to small
employers that contract out for activities, such as office services,
that large businesses provide in-house with no sales tax applied. By the
way, last year Michigan introduced a new 4.95% business income tax,
which will be applied on top of the sales tax.
Last year, amid the national expansion, Michigan was the only state
outside the Gulf Coast to lose jobs and see a decline in economic
output. Comerica Bank recently moved its headquarters to Texas, in part
because of Michigan's hostile business climate. Michigan's 7.4% jobless
rate is the highest of all states and far above the 4.6% national rate.
The state is suffering from the decline of Detroit's car makers, but
that's all the more reason to promote policies that attract new
businesses -- or at least don't drive current employers to Florida. [Governor]
Granholm argues that the combination of new taxes to balance the budget,
and to finance such new public "investment" as job retraining and
education, will reinvigorate Michigan.
She should check her history books. In the past 25 years, the only
period when Michigan's growth has exceeded that of the national economy
was in the mid-1990s after then-Governor John Engler's tax cutting and
welfare reform. For a time, Michigan became the unlikely national leader
in job creation. Now the total tax burden is returning to where it was
before the Engler years.
Michigan last went on a taxing binge in 1983, and voters were outraged
enough to mount a successful recall campaign against two state Senate
ringleaders. This time, two of three Michigan voters have told pollsters
they want budget cuts, not new taxes. It may be that the only way to get
jobs back into Michigan is to make sure the taxing politicians in
Lansing lose theirs.
|October 6th, 2007, 01:48 PM||#2|
Low Range Drifter
Join Date: 11-09-05
Location: Hartland, MI
That's what happens when you vote in a Democrat. Nice work Michigan.