Thursday, March 5, 2009

Michigan Unemployment Hits 11.6%. Time to Raise Taxes!


Today it was announced that Michigan's unemployment rate hit 11.6%. What is governor Granholm's reaction? She announces her support for an increase in gas taxes! Great idea! She has already succeeded in increasing the income tax by 12% and increasing business taxes by 22%. That seems to be working out really well. Not.

Her insatiable appetite for more of your money won't be quenched until no one in Michigan is left with a job.

"In five years, you’re going to be blown away by the strength and diversity of Michigan’s transformed economy." - Governor Granholm, State of the State address, January 25, 2006 (unemployment rate was 6.2%).


  1. It's kind of funny, I've never seen the full "blown away" quote in context before (thanks for posting it).

    When one puts it in the actual context in which it was spoken - she's well on track to be right. In spite of the national recession and our high unemployment rate, we're still here and our quality of life is still high. Best of all, our economy is in the process of diverisification (as West Michigan's booming development demonstrates).

    The tax increases we passed were enough when we passed them; if it weren't for the current recession - the state budget would be $64 million in the black (and possibly more but the numbers on the return from the film credits and the Earned Income Tax Credit aren't in); the vast majority of the budget deficit we're facing is entirely due to the national economic situation.

    There's plenty of evidence that we need to go back to a more progressive tax structure. In spite of the fact that the wealthy are paying less proportionally than they have in years - that wealth isn't making its way to employment or economic growth:

    I'm curious to see if you've read Peter Luke's recent piece in the Press:

  2. Michigan's quality of life has been deteriorating. See the Senate Fiscal Agency's Dec 18 economic report:

    State employment has been dropping since 2000, and state wage growth has been lagging the national average for years (see pages 14 and 15). In fact, wage growth has been negative (see page 9).

    Michigan still has the highest dependency in the nation on the auto industry. I think West Michigan is the only bright spot in the state.

    I think a good argument could actually be made for a higher gas tax, assuming that the money actually goes to repairing road infrastructure, but the business tax surcharge is possibly the worst medicine for an ailing economy.

  3. Michigan's quality of life continues to deteriorate primarily because we're in the middle of a textbook structural change in employment and secondarily because of the idealogues who fight any attempt to change the state's outmoded tax structure (who wield disproportionate power because of the term-limited legislature which is in disarray).

    Stagnant wage growth isn't unique to Michigan though - that's been a nationwide trend for decades.

    I agree - the business surcharge was a terrible idea - but it was caused by those same idealogues who refused the alternative (lumping it into the income tax rate).