Wednesday, April 21, 2004

Sin Tax Update

The Michigan Legislature will this week take up several bills to increase the cigarette tax, the liquor tax, and to extend the estate tax, which is scheduled to expire at the end of this year.

For our feelings on the issue, we'll point you to our earlier post on the issue of increasing the cigaratte and liquor taxes and how they help create and increase a black market in those items.

As for the estate tax, we believe that it is a morally represenhable activity. You pay taxes all your life and then the government taxes you again on the money you've already been taxed on, simply because you died. The federal government has at least repealed the death tax, so the state should follow suit. But of course, the tax and spend politicians who still don't get why business and investment are leaving this state, want to continue taxing the dayligts out of everything that moves - and everything that stops moving.

The real issue isn't the tax increase per se, but the inability of government and politicians to realize how taxation harms the economy and stunts growth. The more of this they do, the longer it's going to take Michigan to emerge from this slump. The one sure-fire way to dramatically improve economic growth is cutting taxes, as both Kennedy and Reagan proved. But then again, no one ever said that politicians were well-informed on history.

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