Monday, October 01, 2007

Rainy Days and Mondays (& Taxes)...

...always get me down. Considering what the Michigan legislature did Sunday night, rain on Monday is so appropriate...

Excerpts from msnbc.msn.com:

The Legislature agreed to raise Michigan's income tax rate from 3.9 percent to 4.35 percent and expand the 6 percent sales tax to some services. (Governor) Granholm signed both measures. Structural changes to state government — including the management of teacher and other public employee benefits — also are part of the package.

Raising the state's income tax to 4.35 percent will raise an additional $765 million for the state. The income tax bill is written so the rate will gradually drop back to 3.9 percent between 2011 and 2015.

Extending the sales tax to some services starting Dec. 1 will bring in an estimated $614 million for the 10 months remaining in the fiscal year at that point, or about $750 million annually,

The tax increases should erase most of a projected $1.75 billion deficit in Michigan's next budget. The final budget for the new fiscal year will include $440 million in spending cuts, including no inflationary funding increase for public universities and community colleges, Granholm said.

There are a number of problems that I see with this action by the Michigan government. First and foremost, the state is in a depression/recession. The unemployment rate is more than 7%, and this hike does nothing to attract businesses and people to the state. Instead, it encourages people and businesses to leave the state. Reduce the tax base, reduce the income to the state, and then what? Raise taxes again? Smooth move, morons...

The next problem is that the Legislature has been working on this new budget for over 7 months, and this is the best they could do? Why weren't cost cutting measures implemented from the last budget re-write? If the common person is expected to tighten their belt and not spend as much if they don't have the money, why can't the government?  Although, to be somewhat fair, there is supposed to be large cuts in government spending, but we will see if that will be the case.

Last is the statement that "The income tax bill is written so the rate will gradually drop back to 3.9 percent between 2011 and 2015." Right...how often are taxes reduced? And by that time, most of the bozos that voted in the increase will be gone, and the tax hike would be permanent because of the same fiscal irresponsibility.

In many respects, we do not hold our politicians (government) accountable for the expenditures that they make. Indeed, how many studies and reports on waste, mismanagement, and sheer stupidity are published, but how many are actually implemented? Not many, I would presume. If they were, government (both Federal and State) would not find themselves running on deficits.

Yep, time to get rid of the Redundancy Department of Redundancy...

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