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Facts about Michigan taxes

EDITOR:

Interesting article recently in Michigan’s Bridge magazine. Hard to believe, but today, Michigan’s total tax burden is among the lowest in the nation. Lot of numbers here, so stay with me, please.

Michigan residents are paying 11 percent less in property taxes than they were before the Great Recession. Because of Proposal A, property tax increases are capped at 5 percent or the rate of inflation, whichever is less. Thus, as property values recovered from the recession, revenues from those values have been slower to keep up. Back in 1977, total state and local taxes in Michigan were 9 percent higher than the national average. By 2014, our state and local taxes were 16 percent BELOW the national average. In 1978 we got the Headlee Amendment, which limited total state tax revenue to no more than 9.49 percent of all personal income earned by Michigan residents. In this century, state tax revenue has remained billions below the Headlee cap.

So why are we not feeling flush? Many of us are, indeed, paying higher taxes. Here’s why: During a state budget crisis about 10 years ago, Gov. Granholm and the legislature raised the state income tax from 3.9 percent to 4.35 percent. Since 2013, it’s been 4.25 percent. Then, six years ago, Gov. Snyder and his legislature kept a campaign promise by cutting business taxes. Ten years ago, Michigan was 29th best in the nation in tax climate for businesses. Today, Michigan is 12th best.

Where did the money come from? From 2013-2015, businesses received a total of $5.2 billion in tax cuts. At the same time, individual taxpayers experienced a tax INCREASE of $4.7 billion, through cuts in tax credits for low-income families, ending of many other tax deductions and credits, and more than one billion in new taxes on pensions. That tax shift from business to individuals amounts to a per capita tax increase of $150 a year, and though many big businesses are now doing well, it has not trickled down to the average hourly worker. From 2000-2014, nationwide wages increased by 44 percent, while in Michigan, wages increased by only 15 percent, or about 1 percent a year, the slowest in the nation.

If we’d kept up with the rest of the country, workers today would average $5,000 more each year. And this is why, even though taxes overall are lower, they just seem to hurt more.

Lola Johnson

Kingsford

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