A new work week and the same old worries in Michigan
By RightMichigan.com Posted in Breaking News | Democrat | Economy | Michigan | tax hike | tax increase | www.RightMichigan.com — Comments (0) / Email this page » / Leave a comment »
Cross-posted on Right Michigan at www.RightMichigan.com.
Welcome back to a semi-normal work week. Is there anything worse than a Monday morning after a long weekend with friends and family? Don't answer that, I'm sure there is... it's just hard to think of anything this early in the morning. Heck, if your football team blows a fourteen point lead with seven minutes in the game while they held the ball in the opponents territory in spite of some of the shoddiest officiating in the NFL to date and then comes all the way back to lose in overtime... that's worse. But that's neither here nor there (and I'm only slightly bitter).
Only slightly more important to a few more people is what's going on here in the state of Michigan as we close in rapidly on the January 15th Presidential Primary and are now only about eleven months from electing a new House of Representatives.
Read on.
So how is the new year shaping up? Don't ask. The Detroit News did and the answers they got weren't pretty.
Last week we learned that job projections peg Michigan with a bleak forecast in 2008. We're expected to lose some-odd fifty-thousand more as we continue to hemorrhage jobs in November and December with a nation's worst 7.7% unemployment rate. Which begs the question, with that many fewer jobs sending tax revenue to the state, and with these massive new Democrat tax hikes almost guaranteed to fall short of projections because of the jobs they kill, aren't we going to face another giant budget deficit next fiscal year?
According to the News:
Gov. Jennifer Granholm has vowed there will be no more tax hikes in the immediate future. Given the political climate, it's unlikely she could get another tax increase passed, anyway.
So that means more budget cuts are likely.
"We're going to continue to have the same problems we have been having -- a rate of growth in revenues less than the growth in spending pressures," said Tom Clay, former state budget official and analyst for the Citizens Research Council of Michigan, a respected budget watchdog group.
Despite approval of $1.5 billion in tax increases, fiscal analysts say Michigan could face a deficit in the range of a half-billion dollars in the next budget year that begins Oct. 1, 2008...
A half-billion dollar budget deficit. Ouch. But here's the real telling number. If we lose the kind of jobs the University of Michigan Economic Conference predicts then the exact same taxes that the Democrats just passed will bring in $104 million less in the next fiscal year. Get it? Raise taxes, kill jobs, drive down tax revenue.
That's opposed to the results we've seen on the federal level, where President Bush's 2001 tax cuts (I bought a Playstation 2 with my refund check, pouring that money right back into the economy) have led to the highest federal tax revenues in the history of history. But apparently that is, in fact, rocket science. It's not something the Democrats in Lansing are willing to even think about duplicating.
So what's a state to do? Just when you worry they're out of ideas the Ivory Tower (read: the Detroit Free Press) comes up with a real doozy.
All of those purchases you're making online? Not only MUST you pay Michigan sales tax on them (wink wink, nudge nudge) but if retailers don't automatically charge it FOR you then you should complain and pressure them into doing that. Apparently that Ivory Tower is way way way up in the clouds.
People often confuse this tax, to which states have a legal claim, with the "don't tax the Internet!" hue and cry. But that battle has recently been refought, with Congress renewing, for seven years, the ban on taxing access to the Internet and any form of Internet communication, from online messaging to voice services.
Nor did Congress take any steps to disturb online companies that refuse to collect other states' taxes. That, however, is a much needed next step. Customers also can pressure those firms to comply. It is, after all, a lot easier than digging through your charge card bills at tax time and figuring it out yourself.
You may think you're getting a bargain, too. But by Michigan law, you owe a use tax -- which is the same 6% as the sales tax -- on out-of-state purchases, and you're supposed to calculate it and send it to the state with your income tax form every April 15. So far this year, nearly 83,000 taxpayers did so, and paid $3.6 million -- a whopping 1.2% of what the state figures is actually owed.
Sort of reminds me of the kid in third grade who raises his hand after the three-o'clock bell to remind the teacher that she forgot to assign the homework.
Of course, the FREEP is missing one semi-important fact about the explosion of internet purchases and the nature of commerce... the fact that you can make certain purchases without paying exorbitant taxes is part of the appeal. If the State taxes less, buyers purchase more. If the State taxes more, buyers purchase less.
Or, if you're the State of Michigan, just tax more and spend more. Like, say, over $100 million on a new Michigan State Police Headquarters that still no one wants. Other than the Governor's developer pals anyways. And much to their chagrin and thanks to the efforts of one lawmaker in particular, this is a story that refuses to die. The Lansing State Journal reports:
Gov. Jennifer Granholm's administration stands steadfast behind the project...
(Critics) object to the fact that no bids were sought for the project and that other sites weren't considered. They note that (developer) Ferguson is a major Democratic player and donor, while Granger is a big benefactor to Republican campaigns.
Jones said another developer told him he could have done it for substantially less.
Jones' bill to block the project has 51 co-sponsors.
But it's not at all clear that the Legislature could undo the deal at this stage even if it wanted to.
This is a bad use of tax dollars," said Rep. Rick Jones, a Grand Ledge Republican who has introduced legislation to block it. "This whole thing just disgusts me."
The developers claim the contract is a done deal and that the state is stuck. Well over $100 million to replace a building that we currently lease for $1 a year... a building that the Michigan State Police say they prefer.
Talk about not getting your money's worth. And the State wonders why no one rushes home during the holidays to cut a sales tax check for internet purchases.