Michigan Tax Burden Grows Despite Claims to the Contrary

In a recent article, political writer Peter Luke reiterates the case for a service tax. Included in the argument are the claims that, "Compared with the rest of the nation, Michigan is about in the middle, in terms of per capita state and local tax collections. Compared with itself, Michigan is a lower tax state than it was a decade ago."

Per capita figures make Michigan seem worse off by comparison to other states since population is less responsive to economic changes than are tax revenues. Still, Michigan's per capita tax burden increased over the past decade.

All measures of a state's tax burdens are imperfect, so a range of measures are necessary to show where Michigan stands compared to other states. Overall, Michigan's tax burdens are slightly above the average state.

Luke also claims that Michigan has a lower tax burden because the state's constitutional revenue limitation allows more spending now than it did a decade ago. But those numbers are problematic to use as a measure of Michigan residents' ability to pay taxes since they include growing government transfer payments as income.

Michigan's tax system currently provides the state with enough revenue to operate, and there are plenty of ways for the state to spend less. A service tax is unnecessary and would further increase Michigan's tax burdens.

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