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Wednesday, March 9, 2011

Okay, friends, buckle up.  I am plunging into the driest topic known to man. The most dreaded of topics.  Tax policy.

But the truth is that in Michigan, tax policy is at the bottom of all of our problems. And by the way.  News flash.   School teachers, social workers, and snow plow drivers are not the root of our problem.  It is our regressive tax policy.  That's why we've got to talk about it.  It
's not surprising we're in trouble.  Our most pressing problem, and no one will talk about it.

The main problem?  Michigan's tax policy is regressive.  That means that the less money you make, the bigger your tax burden is.   The less you make, the higher percentage of your income goes to taxes.  The reverse is true as well.  The more you make, the less percentage of your income goes to taxes.  There it is; our backwards, grossly unfair tax policy.

Our governor spends a lot of time talking about shared sacrifice.  I love the concept of shared sacrifice, we are all in this together.  This is a wonderful idea, and I would love to believe that is what Gov. Snyder really wants.  But until he suggests turning our regressive tax policy into a fair policy, all talk of shared sacrifice is purely hypocritical nonsense.

The solution is simple, fair and would probably be quite popular if our Republican friends could bring themselves to speak truthfully about the issue at hand.  A graduated income tax, which 35 other states have, would go a long way toward solving our problem.  Most taxpayers would pay less than they are presently paying, and those who have higher incomes would pay their fair share, as they do in most other states.

You will never hear Republicans support a fair tax like that, though, because their wealthy benefactors -- the few who are making most of the money -- don't like it.  The Republican excuse is that the wealthy would make a beeline out of this state if we put a graduated income tax in place.  This is simply not true.  States with a graduated income tax are doing just fine --  much better than we are, as a matter of fact.
For those of you who love facts, here are some.  According to the Tax Foundation, 35 states have graduated income taxes.  Seven states have no income tax at all.  And nine states have flat taxes, such as Michigan has. (I'm including Washington, D.C. here) The only state with a lower flat tax than Michigan is Pennsylvania.  Somehow, they make up for that low flat tax, because their tax freedom day is April 21, 18th in the nation.  Michigan's is April 16, 31st in the nation.  That information comes from the 2009 Facts and Figures book, put out by the Tax Foundation.
 
So the Republicans are unequivocally opposed to a graduated income tax, such as 35 other states have, even very conservative states, at that.  So what do Michigan Republicans want to do instead of creating a tax that would be fair for all of our residents?  They want the less well off to carry an even larger  burden by eliminating the Michigan Earned Income Tax Creidt (EITC), taxing retirees, and cutting  funding for school children and college students.

Michigan needs true shared sacrifice.  I am a proponent of that.  But until shared sacrifice is spread across all incomes,  as soon as our tax policy reflects true shared sacrifice,  I think our governor should go back to the drawing board.  And we should stand together to get Michigan back on a track to true prosperity.

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