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Granholm's Tax Warning (Michigan's Tax Increase Fails to Deliver)
Wall Street Journal ^ | 28 May 2008 | Editorial Staff

Posted on 05/28/2008 5:45:35 AM PDT by shrinkermd

...Officials in Lansing reported this month that the state faces a revenue shortfall between $350 million and $550 million next budget year. This is a major embarrassment for Governor Jennifer Granholm, the second-term Democrat who shut down the state government last year until the Legislature approved Michigan's biggest tax hike in a generation. Her tax plan raised the state income tax rate to 4.35% from 3.9%, and increased the state's tax on gross business receipts by 22%. Ms. Granholm argued that these new taxes would raise some $1.3 billion in new revenue that could be "invested" in social spending and new businesses and lead to a Michigan renaissance.

Not quite. Six months later one-third of the expected revenues have vanished as the state's economy continues to struggle. Income tax collections are falling behind estimates, as are property tax receipts and those from the state's transaction tax on home sales.

Michigan is now in the 18th month of a state-wide recession, and the unemployment rate of 6.9% remains far above the national rate of 5%.

Leon Drolet, the head of the Michigan Taxpayers Alliance, complains that "we are witnessing the Detroit-ification of Michigan."

The tax hikes have done nothing but accelerate the departures of families and businesses. Michigan ranks fourth of the 50 states in declining home values, and these days about two families leave for every family that moves in. ..property taxes are continuing to rise by the rate of overall inflation, while home values fall. Michigan natives grumble that the only reason more people aren't blazing a path out of the state is they can't sell their homes. Research by former Comerica economist David Littmann finds that about the only industry still growing in Michigan is government. Ms. Granholm's $44.8 billion budget this year further fattened agency payrolls.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Editorial; Politics/Elections; US: Michigan
KEYWORDS: granholm; michigan; taxes
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1 posted on 05/28/2008 5:45:35 AM PDT by shrinkermd
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To: shrinkermd
The tax hikes have done nothing but accelerate the departures of families and businesses.

Socialists never learn.

2 posted on 05/28/2008 5:47:56 AM PDT by unixfox (The 13th Amendment Abolished Slavery, The 16th Amendment Reinstated It !)
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To: shrinkermd
Gov’t accounting is totally FUBARed. For any Gov’t shill to talk about gov’t expenditures as an “investment” is ridiculous.
3 posted on 05/28/2008 5:48:11 AM PDT by Paladin2 (Huma for co-president!)
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To: shrinkermd

bump for later


4 posted on 05/28/2008 5:49:54 AM PDT by joe fonebone (The Second Amendment is the Contitutions reset button)
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To: shrinkermd

It is counter-intuitive for most liberals, but tax hikes DROP revenue while tax cuts RAISE revenue. Almost everybody shops - why is it so hard to understand that when the prices go up people buy less and when items go on sale, people buy more.


5 posted on 05/28/2008 5:55:25 AM PDT by NonValueAdded ("Just because you're running for President doesn't mean that you are the center of the universe")
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To: unixfox
The tax hikes have done nothing but accelerate the departures of families and businesses.

The logical lieberal solution is to raise taxes more to compensate for the loss of revenue. There are still some rich people in Michigan to soak, aren't there?

6 posted on 05/28/2008 6:00:08 AM PDT by Vigilanteman ((Are there any men left in Washington? Or are there only cowards? Ahmad Shah Massoud))
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To: shrinkermd
The new Michigan fight song:

Hail, to the taxers valiant!
Hail, to our socialist heroes.
Hail, hail to Michigan
The leaders of the rats! Rah! Rah! Rah!
Hail, to the taxers valiant!
Hail, to our communist heroes
Hail, hail to Michigan,
The Destroyers of the West!

7 posted on 05/28/2008 6:01:06 AM PDT by FatherofFive (Islam is an EVIL like no other, and must be ERADICATED)
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To: unixfox

You mean like the dumbasses that elect these people?


8 posted on 05/28/2008 6:02:18 AM PDT by stevio (Crunchy Con - God, guns, guts, and organically grown crunchy nuts.)
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To: NonValueAdded; unixfox

Harvard dean Henry Rosovsky? “Never underestimate the difficulty,” he said, “of changing false beliefs by facts.”


9 posted on 05/28/2008 6:03:11 AM PDT by flowerplough (“articulate and bright and clean and a nice-looking guy.”)
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To: unixfox

Proof positive that some find beating their heads against a wall makes sense.


10 posted on 05/28/2008 6:07:43 AM PDT by meatloaf
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To: shrinkermd

Governor Jennifer Granholm apparently has never heard of the Laffer Curve.


11 posted on 05/28/2008 6:14:18 AM PDT by The Great RJ ("Mir we bleiwen wat mir sin" or "We want to remain what we are." ..Luxembourg motto)
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To: The Great RJ

They don’t allow that in Canada.


12 posted on 05/28/2008 6:16:57 AM PDT by Eric in the Ozarks
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To: The Great RJ

“Governor Jennifer Granholm apparently has never heard of the Laffer Curve.”

But she is proving Atlas Shrugged


13 posted on 05/28/2008 6:19:14 AM PDT by bobjam
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To: shrinkermd
... $1.3 billion in new revenue that could be "invested" in social spending...

Translation, buy more votes.

14 posted on 05/28/2008 6:21:54 AM PDT by depressed in 06 (Bolshecrat, the amoral party of what if and whine.)
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To: Paladin2

To think, “conservative” luminaries such as George Will wanted to change the Constitution to permit her to run for POTUS. She was born in Canada and without a Constitutional amendment she cannot be POTUS.


15 posted on 05/28/2008 6:25:14 AM PDT by shrinkermd
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To: shrinkermd
Argghhhh.....that would open the door for Austrian-born Arnold Alois Schwarzenegger to run for president, also.

(.....which may be the real reason phony and inconsequential token conservatives like George Will want to change the Constitution. Yet again, little Georgie may have a crush on big Ahnold).

Leni

16 posted on 05/28/2008 6:34:34 AM PDT by MinuteGal (Foot Soldier in FR's Light Verse Brigade)
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To: unixfox

Luv those ads on TV telling all to “Move their businesses TO Michigan”....cuz they have great folks there to help you make good.....LOL....


17 posted on 05/28/2008 6:38:49 AM PDT by litehaus (A memory tooooo long)
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To: shrinkermd

Remove the T and the U and she can run for that.

Seriously, I believe this puts Michigan ripe for the picking for the GOP come November. IF, and that’s a big if, the voters in Michigan can get their heads out of their collective ass.


18 posted on 05/28/2008 6:42:41 AM PDT by SaintDismas (.)
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To: stevio

Detroit has a lot of voters who like people paying their bills. People on welfare who don’t want things to change.


19 posted on 05/28/2008 6:43:15 AM PDT by Niuhuru (Don't burn a bra, burn a feminist!)
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To: NonValueAdded

No amount of logic can disturb the genetic code of the average liberal. It’s in the genes, and there it shall remain. The only good thing is the majority are locked into living in MI because they can’t sell their homes.

We better hope they don’t succeed in moving because where ever they choose to go, “its in the genes”, and as soon as they arrive they will begin the rust belt renovation of your state.

I’m sure some one somewhere must be able to invent the procedure needed to transform, leftists, liberals, socialists, environmentalists, activists, vegetarians, communists, and marxists into normal human beings.


20 posted on 05/28/2008 6:43:31 AM PDT by wita (truthspeaks@freerepublic.com)
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