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Death is certain, but taxes?

Oct 8, 2014

There’s an old saying I know you’ve heard: “Nothing is certain except death and taxes.” Benjamin Franklin said that, by the way. He was a shrewd old cynic who I think would be much more at home in the world today than the other founding fathers.

And I’d also guess Old Ben wouldn’t be surprised to know that his death-and-taxes maxim was, like most things, only about half right. Death remains certain, even if we don’t know where or when. But there is very little certain about taxes.

Oh, we are certain to be taxed, in one form or another. Which is a good thing, if you like clean water, fire departments and schools.

But who pays and who should pay the taxes?

What we should be asking is: How high should taxes be? How do you set tax rates to give us the services we need and help the economy grow? To me, those are terribly important questions.Well, we now have some answers.

Bridge Magazine, the online subsidiary of the non-partisan Center for Michigan, has published a ten-part special report: ‘Ten things everyone should know about Michigan taxes.” Additionally, the Detroit Free Press took a data-crunching look at the impact of Governor Snyder’s tax reforms.

Taken together, the bottom line is this: Governor Snyder and the legislature created a massive tax shift, moving a bigger share of the burden from businesses to private individuals.

This was sold to us as a program that would create new jobs. Businesses would move here or expand and add workers.

Yet it now seems clear that this has failed. Economists agreed that Michigan’s tax structure needed reforming. The old Granholm-era Michigan Business Tax was a nightmare.

But dramatically lowering business taxes hasn’t worked as promised. To quote the newspaper, “viewed in totality, Snyder’s tax code revisions have placed a much heavier burden on individuals and haven’t resulted in sufficient job growth to bring Michigan in line with national unemployment numbers.” Nor, the paper found, has the governor been willing to consider tweaking his program to improve things, such as tying business tax breaks to job creation.

The Bridge magazine series is far more comprehensive, and looks at more than just what the governor did. When it comes to business, they found national studies that concluded that wage rate and quality of life issues are far more important than taxes.

Overall, Michigan residents have a slightly higher tax burden than average; twenty states have higher taxes; twenty-nine, lower.

But for the last thirty-seven years, our growth in per capita tax burden has been the slowest in the nation.

And our roads are falling apart. We are paying more in damage to our cars then it would cost to fix the roads. Michigan has cut revenue sharing to cities by more than six billion dollars in the last dozen years. As a result, they have fewer cops, more crime and crummier parks, streets and libraries.

The bottom line on the Bridge series is this: You get what you pay for, and if we aren’t willing to take care of what we got, we lose it.

I wish Center for Michigan founder Phil Power would print this series as a booklet and mail it to every Michigan home.

Jack Lessenberry is Michigan Radio’s political analyst. Views expressed in the essays by Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.