Sunday, November 10, 2024

Take a peek behind the curtain and test drive the NEW StateNews.com today!

Number crunches

Michigans place in taxation report not bad, new study may help give future plans a boost

It may seem jarring to learn that Michigan is in the top 15 states with the highest tax revenues per person and per worker. But no one should start to panic just yet.

Taxes are always a hot-button issue, especially when it seems Michigan taxpayers are paying more than they should. A report by an MSU economics professor shows state tax revenues at $6,082 per worker, based on income, property, sales, alcohol and tobacco, single-business and gas taxes. So that brings the eighth largest state in population in at No. 15 for tax revenue - below New York, Connecticut and New Jersey, with per-worker tax revenues from $7,800 to $9,724.

It’s curious then, with apparently so much tax revenue, why the state is having such a hard time balancing next year’s budget. One might think there is plenty of fat to cut.

And although there probably are areas of the state’s budget that could be reduced, it also is important to recognize that some places are simply more or less expensive to live - some states offer more or fewer social programs, road and communication infrastructures are different, and populations and lass mass vary significantly.

Gov. John Engler touts cutting various taxes 32 times during his tenure in office. But cutting taxes is not always the answer, and the report shouldn’t be construed as evidence for the need to do so. Instead, lawmakers and taxpayers should use reports such as this one as a reference to help them through budget issues.

As the state deals with budget problems - problems that are expected to worsen in the years ahead - Michigan may need every cent of its tax revenue to continue essential services. Despite some gubernatorial candidate’s election-year campaign promises to never raise taxes, some predict the state may find itself in dark waters that would require such a move.

We hope the report helps put tax issues in perspective, encouraging lawmakers to watch their spending, while continue to care for the quality of essential services, such as education, health care and roads.

Discussion

Share and discuss “Number crunches” on social media.