taxes

World Resources Institute

Are cash-starved state legislatures taxing the energy industry as much as they could? 

Barry Rabe is director of the University of Michigan's Center for Local, State and Urban Policy. He's one of the co-authors of a new report that tracks how states are taxing thousands of new oil and gas wells.

Rabe says so-called severance taxes arose from the question, ‘What happens when you take a non-renewable natural resource and remove it for some kind of use?’

He says it's an issue some states are facing for the first time, including North Dakota, which is booming because of oil. Rabe notes that 65% of North Dakota’s budget will come from energy taxes.

Alliance for Retired Americans / Flickr

Seniors could play an important role in the upcoming election, as Michiganders age 50 and older are expected to represent well over half of the voters who show up to the polls next week. That’s pretty typical of a non-presidential election. But as Michigan Public Radio’s Jake Neher reports, seniors and retirees are playing an especially important role in this year’s election.

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.

TIF mismanagement can lead to blight.
Flickr.com

 

Tax increment financing, or TIF, is a flexible tool for downtown development authority boards aiming to encourage private investment and increase the taxable value of their municipality.

TIFs enable portions of a city’s regular property tax to be used for economic development, without a vote from taxpayers. There are eight types of authorities in Michigan that can engage in this type of financing.

David Bieri is an assistant professor of urban and regional planning at the University of Michigan.

Bieri explains the good and bad uses of TIFs. In the early 2000s, DDAs from Kalamazoo to Detroit addressed blight through brownfield remitigation. On the other hand, Bieri cites Bloomfield Park, the unfinished mini-city in Bloomfield Hills, as an example of TIFs gone bad: Blight was created rather than mitigated. 

The Michigan State Capitol.
Steve Carmody / Michigan Radio

LANSING, Mich. - Gov. Rick Snyder has signed a bill to clarify that Michigan never intended to give out-of-state companies a lower tax liability in a 2007 business tax overhaul.

The legislation is designed to ensure the state isn't forced to pay $1.1 billion in refunds in 134 cases after a July ruling from the Michigan Supreme Court in a case involving IBM. The administration and lawmakers worried the court's 4-3 decision could affect other cases in the 2008, 2009 and 2010 tax years.

Snyder said in statement Friday that the bill is a "common-sense solution" encouraging companies to invest and create jobs in Michigan. The state estimates most of the $1.1 billion in refunds would have been paid in the fiscal year that starts in October, throwing the budget out of balance.

They used to say that the definition of a recession was when your neighbor lost his job, and a depression was when you lost yours.

Well, after this week’s monumental Detroit-area rainstorm and flood, we now have a new definition for our dictionary of popular economics. You can say that wasteful government spending is when Washington or Lansing helps someone else.

Proper allocation of scarce resources is when they help -- you.

That may sound like a joke, but all too many people subconsciously feel that way.

You need only drive through the streets of communities like blue-collar Warren and more affluent Huntington Woods to get a sense of the scope of this week’s destruction.

Warren Mayor Jim Fouts has called on Washington for assistance, saying “if the federal government can help flood-damaged communities in various countries, I think they can help flood damage in the city of Warren.”

Good luck with that.

IRS Form 1040.
stockphotosforfree.com

Michigan has been cutting taxes for the past 20 years. The key selling point has been that slashing taxes will create economic prosperity.

A new report by the former head of the state Treasury Department's Office of Revenue and Tax Analysis, Douglas Drake, says these tax cuts have instead drained Michigan of economic life, with our per-capita income rank tumbling, and our unemployment rate way above the national average.

Charles Ballard is an economist from Michigan State University.

*Listen to the full show above.

I think the low point in my faith in democracy came late this winter, soon after I had lost one tire to a pothole. I got home after nearly losing another on the lunar surface of a suburban Detroit mile road, just in time to hear a state senator claiming we needed another tax cut.

Well, I thought, I am now living in a Third World country. But guess what? That senator heard from his constituents, big-time. Before long, he was retreating from his tax-cut talk, legislative tail between his legs. Why?

To quote the leader of his caucus, Senate Majority Leader Randy Richardville R- Monroe, “I’ve heard the message loud and clear that the roads are messed up, and I think the most common phrase I’m hearing from back home is 'just fix the damn roads.'"

Steve Carmody / Michigan Radio

A proposal to greatly increase Michigan’s gas tax goes before a state Senate committee tomorrow.

The proposal has already cleared the state House. Among other things, it calls for taxing fuel based on price, instead of volume. It would generate about $500 million in new tax revenue. That's about a third of what Gov. Rick Snyder and others say is needed to fix the roads.  

Steve Carmody / Michigan Radio

LANSING, Mich. (AP) - Michigan senators are considering whether to significantly increase gasoline taxes over five years to mend roads and bridges.

The talk of pumping more money into transportation infrastructure comes on the heels of a House vote to gradually allow Michigan's 19-cents-a-gallon gas tax to go as high as 32 1/2 cents over time.

It would initially generate $450 million a year, mostly by diverting money from elsewhere in the budget.

Every society functions at least partly on a set of myths. Sometimes these have been highly destructive. For example, believing you are the master race and everyone else deserves to be slaves has potentially destructive consequences.

America has largely operated on good myths, good because most of them had some grain of truth.

For example, the theories that all men are created equal, or that anyone can become rich or succeed at any occupation they choose. Those ideas have, by and large, encouraged hard work and a belief in the future.

Today, Gov. Rick Snyder rolled out a new statewide recycling plan that aims to increase recycling across the state. Michigan is seventh among the eight Great Lakes states in its recycling performance, and the governor as well as recycling activists agree that we can do a lot better. 

The intersection of college athletics and college academics often causes controversy. To what degree are student athletes allowed to get away with lighter class loads in order for them to play? Paul Barrett of Bloomberg Businessweek joined us to answer that very question.

Tax day is tomorrow and procrastinators out there are scrambling to file. Detroit News Finance Editor Brian O'Connor joined us to explain how we can decrease our chances of being audited. 

On the West Coast during World War II, hundreds of thousands of Japanese-Americans were put in internment camps. Matt Faulkner, an author and illustrator for kids, tells the story of these internments in his most recent graphic novel, Gaijin. 

levistaxes.com

It's here, or at least it's almost here: Tax day is tomorrow, April 15. 

You procrastinators are likely waiting until the proverbial 11th hour to file. Others may be already opening the envelope with their refund check. 

But lurking in the back of many minds is that nagging question: Will I get audited? 

In actuality, your likelihood of being audited is pretty low, about one in 100, although as your income increases, so do your odds. 

Let's find out how to decrease your chances of being audited, and the dos and don'ts if the IRS decides to take a closer look at your tax return.

Today we're joined by Detroit News Finance Editor Brian O'Connor. 

Listen to the full interview above.

Steve Carmody / Michigan Radio

LANSING, Mich. (AP) - Michigan Governor Rick Snyder has signed legislation designed to ensure local government budgets aren't hurt if manufacturers and small businesses get planned tax cuts.

A phase-out of taxes on industrial machinery starts in 2016 and is underway for small businesses with equipment. The tax cuts will be halted if a statewide vote fails in August.

R. Kurtz / flickr

We're getting ready for a new project here at State of Opportunity, and we're excited about it.

We'll take the experiences of families in towns and cities around the state and turn them into useful news – the kind of news that usually travels between two people when they talk about the way things really work.

Part of what makes this project work are stories and insights from you and the people you know. 

Right now, we're looking for stories about taxes.

In an apparent attempt to pander to voters, the Michigan Legislature is rushing to pass an election year income tax cut. This is a little baffling, because the voters don’t want one.

The state has a budget surplus – on paper, anyway – of a little less than a billion dollars. Two weeks ago, an EPIC-MRA poll found only 11% of the voters thought a tax cut was a good idea. The rest were divided about evenly between those who wanted it to go to schools and those who want it to go to our roads.

Steve Carmody/Michigan Radio

DETROIT (AP) - Gov. Rick Snyder says he won't reconsider a controversial tax on income of certain Michigan retirees.

Michigan has a large budget surplus, but Snyder tells The Detroit News that revisiting the 2012 tax is not on his radar. He calls it an issue of fairness, saying pensions shouldn't be treated differently for tax purposes than other retirement income.

user The Geary's / Flickr

If you need a vital record in Michigan, you'll likely pay more.

MLive's Jonathan Oosting reports a bill recently passed by the state Senate now heads to Gov. Snyder's desk:

Under House Bill 4786, the basic fee for a vital record search will rise from $26 to $34, while an authenticated copy of a birth, death, marriage or divorce record will rise from $29 to $42. Creation of new birth or death certificate will rise from $40 to $50.

Recent budgets for the Department of Community Health have assumed $5.5 million a year in vital records collections, but according to the Senate Fiscal Agency, revenues have come up short in recent years, leaving a $1.5 million structural deficit that the increased fees are designed to remedy.

Center for Local, State, and Urban Policy / UM's Ford School of Public Policy

Michigan's cities, towns, and villages are seeing an overall improvement in their ability to meet their financial needs, but hundreds continue to struggle. That's according to an annual report by the Center for Local, State, and Urban Policy at the University of Michigan's Ford School of Public Policy.

The report finds that smaller municipalities are having a tougher time than those with populations of more than 30,000. And municipalities in central Michigan and the southern lower Peninsula have been particularly hard hit.

Pothole in a road.
Wikimedia Commons

Each week we take a look at Michigan politics with Ken Sikkema, former Senate Majority Leader and Senior Policy Fellow at Public Sector Consultants, and Susan Demas, columnist for MLIVE.com.

Governor Snyder has been calling for increased funding for Michigan roads to the tune of $1.2 billion a year. This is one of the items he has not gotten a lot of traction on so far from lawmakers on either side of the political aisle.

According to Sikkema, the last time Michigan increased fees and a tax for transportation funding was back in 1997.

"The reason we keep going back to this sales tax issue is because Michigan is relatively unique. It has a sales tax on top of its state and federal gas tax and that sales tax doesn't go to roads it goes to schools and revenue sharing. There are only about three or four states in the country where all the taxes at the pump don't go to roads. Michigan is one of them," he said.

Are better roads, better for business?

Yesterday I talked about Washington’s offer to expand Medicaid to many Michiganders who currently have no health insurance. The government has offered to make the program available to many poor, but not officially poverty-stricken, Americans.

States who participate will pay only a fraction of the cost. This would immediately provide health care to hundreds of thousands who don’t now have it, and be extremely beneficial to virtually everyone, including employers, who would have a healthier work force.

Though some states sensibly ratified this almost immediately, Michigan has dragged its feet, largely because of bitter ideological opposition to anything that seems to be “government” health care. I said yesterday that this was irrational and was harming our state.

But while I heard from many people who agreed, not everybody did. One woman said I just didn’t understand that this would be terrible because it would be an expansion of government. In fact, the Tea Party has denounced more Medicaid as tyranny.

Well, I think that’s nonsense; I don’t think extending an already existing benefit to more people is expanding government.

Wikipedia

There’s legislation pending in Lansing that would allow voters to amend local charters to cap public employee compensation and benefits.

Courts have held that local initiatives don’t trump collective bargaining rights.

Former state Representative Leon Drolet heads the Michigan Taxpayers Alliance. He says the legislation is an effort to get around that, to let voters run ballot drives and amend city charters.

“There would still be a collective bargaining process,” Drolet explained. “They would still set benefit levels, but there would be a cap on what the city could agree to, and what could be part of that negotiating process. Right now, there’s no cap.”

Michigan is a net giver when it comes to dollars leaving the state in federal taxes. According to the Economist, from 1990 to 2009, $1.23 trillion went out of the state in federal taxes, while $1.03 trillion in federal spending came into the state during that time frame.

user: Boss Tweed / Flickr

Michigan could get a boost in new tax revenues if the federal government approves proposed changes to immigration laws.

That’s according to a new report.  

The Institute on Taxation and Economic Policy predicts Michigan could gain $35 million dollars a year in new sales, property and income tax revenues, under the immigration changes.

psmag.com

Michigan lawmakers are looking at how to get online retailers to collect state sales taxes.

Currently, shoppers are supposed to report any sales taxes they owe on online purchases, and pay them with their income tax.

But most people don’t.

State Representative Eileen Kowall’s bill would put the responsibility on the online retailer.   She’s quick to say this is not a tax increase, just making sure that the taxes that are owed are being paid.

Kowall says the current system puts Michigan’s ‘bricks and mortar’ retailers at an unfair disadvantage.

Official portrait

State House Democrats spent “tax day” pushing a plan to repeal several state tax policies.
 

LANSING, Mich. (AP) - Michigan says the new corporate income tax returns it's processing are much shorter in length than other business tax returns.

The state Department of Treasury says the returns submitted to date average 17 pages. That's 41 fewer pages than the average Michigan Business Tax return.

The Corporate Income Tax approved in 2011 took effect for the 2012 tax year. Some businesses still file an MBT return because they qualify for certain tax credits.

The state says some MBT returns are longer than 1,000 pages.

User: Brother O'Mara / flickr

Michigan could loose $140 million if federal budget cuts happen Friday

"The White House says Michigan faces about $140 million in losses if an automatic federal budget cut takes effect Friday, and U.S. Sen. Carl Levin says he's hopeful the deadline pressure will prompt Congress to raise money by closing some tax loopholes. The cuts include $67.7 million in gross pay to 10,000 civilian Defense Department employees in Michigan and $42.2 million to K-12 and disability education programs in the state," the Associated Press reports.

Bankruptcy planning for Detroit

"It appears that officials are laying the groundwork for a so-called 'managed bankruptcy' in Detroit—though they hope that won’t actually happen. A process for going through chapter nine municipal bankruptcy is laid out in the state’s new emergency manager law that kicks in next month. Governor Snyder acknowledges that bankruptcy might be the only way to reduce Detroit’s long-term debt—estimated at more than $14 billion," Sarah Cwiek reports.

Taxes impact low and moderate earners this year

"Changes to Michigan's tax structure are hitting low and moderate earners hard this year. Lawmakers approved changes in 20-11 that cut 1-point-6 billion dollars in business taxes, but raised taxes on individuals. Low-income families could be the hardest hit, with the elimination of the child tax deduction, and a reduction in the Earned Income Tax Credit," Vincent Duffy reports.

Where do Michigan's tax dollars go?

Feb 18, 2013
John-Morgan / creative commons

Ever wonder where your Michigan tax dollars go?

MLive’s Jonathan Oosting has an article today that breaks it all out.

He notes that:

Michigan is one of eight states that levies a sales tax on fuel purchases, but it does not devote any of that revenue to road maintenance or repairs.

Steve Carmody/Michigan Radio

LANSING, Mich. (AP) - In the height of tax season, many Michigan residents owe more money to Lansing.

Some major income tax changes approved 21 months ago by Gov. Rick Snyder and lawmakers are just now starting to hit taxpayers filing their state returns.

Homeowners and renters used to qualify for a credit if their household income was no more than around $83,000 a year. Now they don't get it unless their total household resources are $50,000 or less.

A state tax deduction for children is gone. So is a special exemption for seniors.

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