Tuesday, September 20, 2011

Michigan Republicans Sure Do Love Them Some Taxes

While we watch national Republicans reach for the smelling salts and the TV cameras over the mere mention of the word "taxes" when it comes to dealing with the federal budget, someone should make note that Michigan Republicans have found that passing a $1.4 billion tax increase on citizens was so much fun that it's the first place they turn to when they want to fund their priorities. The juxtaposition is quite amazing when you stop and think about it.

Now, none of the following has come to pass yet, but it sure is curious that the idea of new taxes keeps popping up from the party that supposedly serves a Tea Party crowd that made a huge show over how oppressed they were at having to pay for the world that want to live in, not to mention the obstruction the GOP dished out when the Democrats held the governor's chair and the House. Only one story so far mentioned that Snyder wanted to add a tax to pop and increase cigarette taxes as part of his health initiative; makes you wonder what might have happened had it gone mainstream.

Whether Snyder's proposals will go deeper is a subject of some question. Gongwer has learned that a draft of the message from about six weeks ago included some major proposals, like taxing sugared beverages and raising the cigarette tax from $2 to $3 a pack. That proposal also called for bolstering physical education requirements in K-12 schools. However, sources also told Gongwer that the Snyder administration has significantly pared its proposal and some of those items might have been eliminated from what Snyder will propose.

He obviously backed off on the idea. The beverage people would have thrown a fit and starting running incessant TV ads as they lobbied lawmakers something fierce, and the problem with raising taxes on cigarettes is that eventually it would create a huge black market for smuggling. Ask New Jersey, who has seen a whopping 40% of the cigarettes smoked in that state come from criminal enterprise, after they enacted one of the highest taxes in the nation at $2.70 a pack.

So, that's out the window for now. But when we turn to the issue of fixing the roads, a problem that was repeatedly pointed out during the Granholm administration and was dismissed by a GOP "no new taxes, ever" legislature that refused to lift a finger to serve the state, we find a very big bill coming due if we actually want pavement...

To get most state and local paved roads into good or fair condition, another $1.83 billion per year will be needed from 2012 to 2023, according to a bipartisan report from two members of the Michigan House Transportation Committee.


Rep. Rick Olson (R-York Township) said he is participating in Snyder's workgroup on infrastructure, which is examining whether new revenue for roads should be proposed.

"I've got my opinions and whether my opinions are worth a darn is another question," he said. "There's a lot of ideas being tossed out and exactly what the governor will recommend, we'll have to wait and see."

But Olson said the revenue would have to come from a "user fee of some sort," calling both the current gasoline tax and vehicle registration charge user fees. But he also noted that to raise all the revenue through a gasoline tax hike would require more than doubling the levy, and that's not going to happen.

There has been some discussion of a mileage-based user fee although the trouble with that proposal is it conjures images of Big Brother with a device to measure mileage. Olson said he is exploring whether such data could be gathered without a device.

A flat yearly fee would probably be the best bet; that way you can get the electrics to pay their share as well, a problem that other states are starting to address as they realize that cars that don't buy gas don't pay for the upkeep on the roads they use. Mileage trackers - no. Besides the very creepy big-government-tracking-your-every-move aspect, it would discourage day trips to the beach and such if people thought a jaunt on a whim would add to their tax bill. That could hurt in-state tourism and the small businesses that depend on it. Just drop the idea now.

Snyder has gone on record as being against a gas tax, but we have to fix the roads. Olson said he is looking at a "lowest-cost scenario" - which means we are going to have to keep fixing the roads. They'd rather do it cheap that do it right, so get ready to pay more in the long run, whatever they finally come up with.

And last but not least, collecting sales tax on internet purchases, something that should have been done from the start.

The Michigan Retailers Association is making a renewed push to require more businesses selling items over the Internet to collect the state's 6 percent sales tax.

Legislation dealing with the issue is expected to be discussed Tuesday at the state Capitol.

The Michigan retail group says some out-of-state, online-only retailers use legal loopholes that allow them to avoid collecting state sales tax at the point of sale.

They are right. We have a self-reporting system here in Michigan, but you know that isn't coming anywhere near the actual amount of sales. This is something that probably should be addressed on the national playing field so businesses don't have to worry about dealing with the paperwork of 50 different sales tax rules and rates, not to mention any local or city taxes that might be involved. Very complicated problem that won't have a simple solution.

The irony here would be delicious if it weren't so incredibly frustrating. Obviously Michigan Republicans have no problem reaching for tax increases on the little guy when they hold the power, but when Democrats ask for everyone to pay their fair share? Suddenly we have to break out the snake flags and funny hats and talk of 2nd amendment remedies. Take note Democrats - it was all a bluff. Those people have all but disappeared now that Republicans are in power. Ask yourselves why.

Perhaps if the media takes notice of this trend, and starts to point out the hypocrisy, we can have an adult conversation about taxes and investment in our state and country. But until then...