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Michigan Governor Wants the Elderly and Poor to Pay


Much More, so that Businesses Can Pay Much Less

Michigan Governor Rick Snyder has taken a lot of heat for his budget plan over the last week or so, and for very good reason. Snyder is currently seeking to raise individual income taxes — primarily on elderly and poor Michiganders — by some $1.7 billion per year. Rather than using this money to help close the state’s budget deficit, Snyder is asking some of Michigan’s most vulnerable families to hand all this money over to businesses, in the form of a roughly $1.8 billion business tax cut.

Snyder would like to replace the state’s much maligned Michigan Business Tax (MBT) — a sort of hybrid between a corporate income tax and a sales tax — with a true corporate income tax. The basic idea isn’t necessarily a bad one, but the corporate income tax Snyder has in mind is much too modest. Overall, the swap would raise $1.8 billion less per year than current law.

In order to make up this difference during such tight budgetary times, Snyder has proposed a variety of personal income tax increases on Michigan families. The most notable increases include eliminating the state’s generous pension tax breaks (a change opposed by 53% of state residents) and scrapping the state’s Earned Income Tax Credit (EITC) (a change opposed by 58% of the state). Snyder is also seeking to eliminate extra exemptions available to elderly taxpayers and families with children.

Overall, the Michigan League for Human Services (MILHS) found that individual income tax bills would rise by 31% under Snyder’s plan, while the state’s businesses would receive a staggering 86% tax cut. So much for shared sacrifice.

http://www.ctj.org/taxjusticedigest/archive/2011/03/michigan_governor_wants_the_el.php

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  • http://Yahoo.com Charles Verschage

    What the govenor is proposing is insane! The reason behind this proposal is that companies and corporations, which are literally taxed so heavily that its causing them to seek to move their businesses out of state, whereby profit margins can be a significant reason to stay, but proposing to tax the elderly and the very poor is completely out of line as well.