State revenues: enough with the whining already!

What happened?

Last week the Legislature passed a continuation budget that extended the deadline for passing the final Fiscal Year 2008 budget by four weeks. Governor Granholm refused to sign it, stating she would not sign any such proposal without a guarantee from the Legislature that there would be new revenues. Because of this, the state government partially shut down for 4 hours and 18 minutes on Monday.

At 4:18 AM Monday morning, the Governor signed the continuation budget after two new sets of revenues were passed in both the House and the Senate; this ended the shutdown.

The new revenues

The state's income tax will go up from 3.9% to 4.35% - still lower than 2/3 of the state's income taxes. The state expects more than $750 billion in new revenues form this tax increase.

Officials also expect a similar amount to be generated by an extension of the 6% sales tax to a number of services, which are listed here.

How does Michigan's new tax rates stack up?

I'll let this article from the Detroit Free Press sum it up:

Thirty-six of the 43 states with income taxes have rates higher than Michigan's new 4.35 rate, at least as of January 2007, according to the Federation of Tax Administrators. But a fair comparison is elusive because most states, unlike Michigan, have graduated income taxes under which taxpayers see their rates increase as their incomes go up.


The state's 6 percent sales tax in two months will go from covering 26 service categories to covering 53, including new categories such as skiing, consulting and interior design. At that point, Michigan will rank 27th nationally in the number of taxed services, according to the Michigan Department of Treasury.

Michigan is tied with nine other states that have a 6 percent sales tax, the nation's 11th highest. California has the highest rate, at 7.25 percent, while Colorado's 2.9 rate is the lowest among states that have sales taxes.
Hey conservatives, if high taxes mean weaker economies, then why is Michigan's unemployment rate - 7.4% - the highest in the country instead of being in the middle of the pack?

What this all means for you

Will you pay more in taxes? Yes, but not much. Back to the Free Press article:
The combination of a higher income tax and sales taxes on more services will cost a family of four earning $50,000 a year about $207 - $157 in income tax and about $50 in sales tax, treasury officials estimate.

"That's $4 a week per household," Kleine said. "What that is doing is preventing very drastic cuts in higher education, school aid, Medicaid and public safety."
$4 per family per week to keep Michigan from becoming even worse off? Sounds like a good investment to me - and I'm a college student whose family has mediocre health insurance!

So enough with the whining and complaining about having to pay more. Tax cuts have not helped Michigan's economy, nor will tax hikes hurt. Please don't complain about having to pay just a little less than you used to. A few dollars a week is NOT going to hurt your bottom line.

If anything, you ought to be complaining not about taxes that aren't really that high, but about the high cost of gas (which Democrats have tried to do something about), or prescription drugs (which Democrats have also tried to do something about).

Or having to spend $4.50 for a pop at Kelly/Shorts Stadium. Which I don't think many Dems can do anything about.

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