Michigan’s Many Tax Ranks

Defenders of Michigan's unreformed big government status quo like to cherry-pick measures of comparative state tax burdens that show this state to be "no worse than most."

Yet getting a valid indication of whether one state's overall tax burden is higher or lower than another is more complicated than most people imagine. Therefore, perhaps the best practice is to place a variety of such indexes side-by-side and let people judge for themselves.

The various comparisons show that Michigan ranges from mediocre to bad. Not included are tax-like burdens imposed by other policies, such as Michigan's notoriously business-unfriendly environmental and labor regulations. Given those additional burdens, "We're no worse than the rest," is hardly a useful public policy prescription for a state that is much worse than the rest in the rate of its economic decline.

Addendum:

The first group of comparisons above using  "total government revenue" figures do not include federal money that is "passed through" state budgets, because that doesn't help assess a state's relative tax burden relative to other states. It's nevertheless interesting to see the comparisons when that federal money is included. Here are those figures:

Data was compiled from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. Alaska is unique in that a very large portion of its government revenue comes from gas and oil extraction royalty payments.

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James M. Hohman is a fiscal policy research assistant and Jack McHugh is senior legislative analyst at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the authors and the Center are properly cited.