January 4, 2013

The Grand Rapids Press: New report shows Michigan tax system unfair, but reactions continue along partisan lines

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(PDF of Original Post)

By Jeff Cranson | The Grand Rapids Press
November 19, 2009, 9:36PM

Without exception, every business advocacy organization, special interest group and partisan of any stripe screams these days for some sort of change in Michigan’s governmental structure.

Now comes another report telling us what anyone paying attention has known for years: the state’s tax system is dysfunctional and rife with inequity.

Our state has an unfair and regressive tax system, says Matthew Gardner, executive director of the Institute on Taxation and Economic Policy.

Taxpayers in income categories rated middle or below pay much more in state and local taxes, as a percentage of income, than the wealthy. The institute’s study offered those conclusions based on analysis of taxes in all 50 states.

The institute is non-partisan, but no matter. Reactions broke along partisan lines today.

“The governor supports both a graduated income tax and an expansion of the sales tax to services, which would both make the tax system more progressive,” Megan Brown, a spokesperson for Gov. Jennifer Granholm, told the Lansing news agency, MIRS, today.

A spokesperson for the state’s top Republican, Senate Majority Leader Mike Bishop, said Bishop opposes anything that would mean higher taxes for anyone.

Bishop is seeking the attorney general seat in 2010 and has already lost support from big donors like Peter Secchia who won’t forgive him for going along with the Michigan Business Tax in 2007 to take the state out of shutdown mode because of a budget impasse.

Any wonder he cannot or will not support anything that can be construed by opponents as a tax hike?

Even as the report was released today, Doug Rothwell, president and CEO of the group formerly known as Detroit Renaissance, now Business Leaders for Michigan, was in Grand Rapids talking about the need to lower the state’s 6-percent sales tax and at the same time extend it to many more services.

To be fair to our state, the rest of the nation has seen a gradual but substantive shift in the tax burden since World War II.

This table from the Tax Policy Center illustrates something else of interest. Our nation’s top marginal tax rate was 94 percent in 1944. That rate stands at 35 percent today.



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