Americans for Prosperity-Michigan

Oakland Press editorial: Tax hike proposals outdated, ill-advised

By The Oakland Press     –     September 9, 2009

It was recently reported that a coalition of social service, education and labor groups wants the state to change its tax structure to raise more revenue and prevent deep cuts in the budget year that starts Oct. 1.

Shortly after this news report, Gov. Jennifer Granholm seemed to squelch the idea by saying she would not support any new taxes. However, on Tuesday she came out with her own set of proposed tax increases.

So, the question remains, what are people in such coalitions and Gov. Granholm thinking? Are they that blind to the dismal condition of the state’s economy?

The coalition’s plan includes expanding the sales tax to “nonessential” items such as entertainment and landscaping services to raise nearly $1.7 billion. The partnership also wants to change the flat income tax rate to a graduated one, raising about $400 million, and end tax exemptions to generate $600 million.

Partners promoting the plan include the Michigan League for Human Services, the Michigan Education Association and Progress Michigan.

At first, we thought this might just be a joke, but with the state facing a $2.8 billion budget deficit for the next fiscal year — this isn’t funny.

Raising taxes shouldn’t be an option. It was done at the last minute in the budget crisis two years ago and resolved nothing. It merely delayed another inevitable budget shortfall.

There’s nothing new in these proposals. All of these “revenue enhancement” suggestions were discussed and dismissed two years ago.

If this group succeeds in pushing this asinine plan through, the only people left in Michigan would be the state employees and the taxes on their salaries would not be enough to support their wages.

Raising taxes is an outdated mode of raising revenue, geared to when the auto industry was thriving and Michigan lawmakers only had to worry about how to spend the surplus dollars.

What would raising taxes now do to the state’s reeling economy? Would it remove us from first place among the states for joblessness?

When you talk about doing away with tax exemptions, that would include the film industry, the Orion plant’s small-car deal and the idea to turn the shuttered Wixom Ford plant into a renewable energy park. All of these have potential to help get this dead-in-the-water state economy going again.

There are no guarantees, but at least securing these deals showed some out-ofthe-box thinking.

Raising taxes along the lines proposed by the coalition is an old idea that should be locked away in a box and buried, permanently.

Instead of constantly resurrecting these old taxing ideas, why not try something new? California is in almost as big a mess as we are and they’re conducting what has been called a statewide garage sale. State officials are selling everything in sight. In fact, they are selling stateowned vehicles autographed by Gov. Arnold Schwarzenegger.

Unfortunately, we don’t think Gov. Jennifer Granholm’s moniker would draw quite as much cash but the idea is refreshing.

Maybe Michigan could also conduct a “garage sale.” How about selling days or weeks in the governor’s mansion on Mackinac Island? That certainly is a much more original and workable idea than raising taxes.