Connect with us

Michigan

Rick Haglund: Lots of ideas to overhaul Michigan’s tax system, but little agreement on what to do ⋆ Michigan Advance

Published

on

Rick Haglund: Lots of ideas to overhaul Michigan’s tax system, but little agreement on what to do ⋆ Michigan Advance


I’m sorry, but this column is about tax policy. 

Bor-ing, right? Maybe so, but how state lawmakers design a tax structure can have a significant impact on the finances of residents and businesses, and on the state’s economic competitiveness.

Lansing has been consumed by dealing with hateful social media posts by state Rep. Josh Schriver, R-Oxford, and an interminable fight over who is running the state Republican Party. But several proposals that could radically change tax policy in Michigan are floating around the Capitol.

Gov. Gretchen Whitmer’s Growing Michigan Together Council, an initiative aimed at boosting the state’s stagnant population, has triggered a debate over the role of taxes in attracting more people to Michigan.

Advertisement

Republicans complained the council’s report was a surreptitious plot to raise taxes to pay for favored Democratic programs that wouldn’t increase the state’s population. 

Council members, including Republican Co-Chairman John Rakolta, denied that, saying the council’s six-month work schedule left no time for a discussion on taxes.

John Rakolta | Courtesy photo

Rakolta, speaking at the Detroit Regional Chamber Detroit Policy Conference last month, said there should be no talk about new taxes until the state develops a tax structure that’s “appropriate for the 21st century.”

But critics of the council’s report are “afraid to go down that path,” he said. Dismissing the council’s work is an “easy way to throw a red herring into the mix and distract everybody and the press that it’s all about taxes. It isn’t about taxes. It’s about: the state of Michigan is broken.”

Rakolta, chairman of industrial construction giant Walbridge, offered no specifics about what he thought a modern tax policy should look like. He said Michigan should implement “zero-based budgeting,” which would require the state to annually justify every program expense.

Advertisement

But some of his fellow business leaders are anxious for tax cuts. The West Michigan Policy Forum, a group of business executives that includes such heavy hitters as Amway Co-Chairman Doug DeVos and office furniture executive Matthew Haworth, is calling for the state to eliminate the personal income tax.

Backers of the idea claim states with no income taxes, including Texas and Florida, have among the fastest-growing populations. But states with no income tax make up lost revenue with other taxes.

The policy forum didn’t offer ideas for replacing Michigan’s $8 billion in annual income tax revenue, nearly two-thirds of state’s general fund tax revenue, but said there should be a “responsible transition” to its elimination.

Meanwhile, a group called AxMITax is seeking to place a proposal on the November ballot that would eliminate residential and business property taxes, the primary source of funding for local governments and a significant revenue pot for local schools.

The summary language of proposal was approved last month by the Michigan Board of State Canvassers, but  the board has yet to approve the ballot form. 

Advertisement

AxMITax said the measure would end the growing problem of property tax foreclosures. Any new local taxes would require 60% voter approval under the proposed ballot issue. Raising state taxes by more than .1% would require a two-thirds vote of the Legislature.

Karla Wagner of AxMITax said if eliminating property taxes results in libraries and museums closing, so be it. 

Another group says Michigan’s tax system must change to support the investments needed for Michigan to thrive in an economy that requires higher levels of education in its workers and make the state more attractive to new residents.

Eliminating property and income taxes is an irresponsible, dangerous idea that, rather than make Michigan a more vibrant state, would likely bankrupt it.

Advertisement

The Michigan League for Public Policy has long called for a graduated income tax system in which those with higher incomes pay a larger percentage of their incomes in taxes than lower-income residents. 

Thirty states and the federal government have graduated income taxes. Michigan has a flat income tax rate of 4.05% that will return to last year’s rate of 4.25% in the 2024 tax year because of a court order in a dispute over whether this year’s rate was a permanent or temporary cut.

The MLPP, citing a report by the Institute on Taxation and Economic Policy, said that the top 1% of Michigan earners pay an effective income tax rate of 5.7% while those with the lowest incomes pay an effective rate of 7.1%.

Michigan’s tax system is “upside down,” said Rachel Richards, MLPP’s fiscal policy director, in a Michigan Advance guest column.

Advertisement

While the state’s budget remains stable after billions of dollars in federal COVID-related programs have been exhausted, future state revenues will not be sufficient to “prevent us from returning to the decades of disinvestment in Michigan workers, families and children that we saw prior to the pandemic,” Richards said.

Implementing a graduated tax system would be extremely difficult. It would require voters to change the state constitution and would be vigorously opposed by business lobbying groups. 

But eliminating property and income taxes is an irresponsible, dangerous idea that, rather than make Michigan a more vibrant state, would likely bankrupt it.



Source link

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Michigan

Will Mikey Keene be Michigan’s Week 1 starting quarterback in 2025?

Published

on

Will Mikey Keene be Michigan’s Week 1 starting quarterback in 2025?


Welcome to SB Nation Reacts, a survey of fans across the NCAA. Throughout the year we ask questions of the most plugged-in Michigan Wolverines fans and fans across the country. Sign up here to participate in the weekly emailed surveys.

Michigan now has a veteran quarterback in the fold for the 2025 season. On Monday afternoon, Fresno State transfer QB Mikey Keene committed to the Wolverines.

Keene had a 70.5 completion percentage in 2024 with 2,892 yards with 18 touchdowns and 11 interceptions at Fresno State. Keene was at Central Florida for his first two years and is familiar with Michigan’s new offensive coordinator, Chip Lindsey. Lindsey was Central Florida’s offensive coordinator in 2022 while Keene was at UCF. Keene fared well in ‘22 with Lindsey when he saw the field, throwing for 647 yards, six touchdowns and one interception with a 72.3 completion rate.

Does Keene’s veteran presence and familiarity in Chip Lindsey’s scheme give him the edge to ultimately be named Michigan’s starting quarterback in Week 1 against New Mexico next season? Or will the 2025 No. 1 overall prospect and No. 1 QB Bryce Underwood prove to be ready to roll right out of the gate? Vote below.

Advertisement

Whether Keene winds up starting or not he was brought in to compete with Underwood and receive a shot at the starting position in 2025. Keene, who stands 5-foot-11, 200 pounds, will be entering his fifth collegiate season in 2025 and has amassed 8,245 passing yards, 65 touchdowns and 28 interceptions in his career with a 67.8 completion percentage.



Source link

Continue Reading

Michigan

Snow, sleet and freezing rain hit Southeast Michigan

Published

on

Snow, sleet and freezing rain hit Southeast Michigan


Snow, sleet and freezing rain hit Southeast Michigan – CBS Detroit

Watch CBS News


Sleet and freezing rain arrived first before snow kicked in through Monday evening.

Advertisement

Be the first to know

Get browser notifications for breaking news, live events, and exclusive reporting.




Source link

Advertisement
Continue Reading

Michigan

President Biden commutes death sentences for 37 inmates, including Michigan man

Published

on

President Biden commutes death sentences for 37 inmates, including Michigan man


President Biden commutes death sentences for 37 inmates, including Michigan man – CBS Detroit

Watch CBS News


President Biden on Monday commuted the sentence of a Michigan man who was on death row for killing a woman more than 20 years ago.

Advertisement

Be the first to know

Get browser notifications for breaking news, live events, and exclusive reporting.




Source link

Advertisement
Continue Reading
Advertisement

Trending