SEARCH BLOG: MICHIGAN TAXES
It's been strangely quiet since the lines have been drawn: expanding government on one side; shrinking economy on the other. A few editorials here and some baffling noises from politicians there. But I'd say that this is just the calm before the tax storm hits in Michigan.
Michigan's Democrat Governor Jennifer Granholm [who just endorsed Mrs. Clinton for president] and Democrat legislators have gotten their way and passed a tax on services in order to erase a budget deficit of about 5%. There is talk of some budget cuts [after the increase], but that's just talk so far.
Meanwhile, Michigan residents are tightening their belts. Some are trying desperately to get out of Michigan by selling their homes at 1990 prices. Others are simply walking away from what they can no longer afford. Business are folding their tents.
But Michigan Democrats are wringing their hands about a budget that is only expanding by a couple billion dollars. As I wrote on October 1:Well, I'm going out on a limb here, but I'm predicting that 1) the Democrats will do everything they can to make sure the service tax sticks and 2) the service tax revenues will be far less than the Democrats predict which will bring them back to the trough for increases in other taxes. [It should be noted that the income tax is increasing, too].
It's difficult to find how the 2008 budget bottom line actually compares with the 2007 budgeted/actual spending [strangely, the budget numbers seem hard to find]. It looks as if the 2008 budget is $43.4 billion, but that could be changing minute-to-minute. Compare that with the $41.7 billion approved for the 10/2006 - 10/2007 period.That works out to a year-to-year state budget increase of almost 4.1%.
The turnip is drying up and the Democrats are still trying to squeeze it.Well, it's just a tax on business... not on people.
And what runs those businesses and what do those businesses employ and from what does the state receive income and profit taxes now?It's time government does what businesses do when faced with very difficult situations: cut back... significantly.
There have been enough examples of waste identified and processes so inefficient and unresponsive that a flat 5% cut... across the board for every single program... should be enacted.Sure, the reaction is "We can't do that. [Fill in the blank] can't survive with a 5% cut in the [fill in the blank] program."
Yes [fill in the blank] can survive with 5% less state involvement. Has anyone wondered how much Ford, GM and Chrysler's budgets have been cut over the past few years so that they can survive?That still leaves 95%... which is still higher than many people can budget for themselves versus a year or two ago.
And about all of those new programs... to give away those service tax dollars....What do you think will happen when the expanding Democrat government comes back for more taxes to balance their expanding budget?
Don't stand in front of the fan...