Tag Archive for Michigan Gas Tax

Nolan Finley really should come out of the closet.

Supporter of Detroit bailouts and special Detroit tax hikes, a non-libertarian “Libertarian” for president, noted contributor to the democratic party and now this.

This latest rant might have been credible if it weren’t for this.

I’d post that clown pic of him right about now…if I didn’t find that demeaning to actual clowns whose job it is to get people to laugh on purpose.

‘Nuff said.

 

 

 

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Another tale of not learning from the lessons of history…

For a so-called conservative, “Republican” Rick Snyder sure does have this thing for imposing a tax hike on Michigan Motorists (along with the aid of his BFF Sen. Arlan Meekhof).

He even thinks that his own story is proof positive that it can be done.

I just love it when Mr. “relentless positive action”, conveniently forgets to include several glaring details.

Oh well, those who fail to learn from the lessons of history…

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MLive Endorses Proposal 1 – Epic Math Fail or Outright Mendacity?

Journalists Bravely Display Their Mathematical Deficit, or......?

fuzzymath
The MLive Media Group Editorial Board endorsed Proposal 2015-01 this morning. The endorsement was no real surprise, given the blizzard of slanted reporting MLive has been posting on Proposal 1 over the last 30 days. The real surprise here was the shoddy math cited in the endorsement:

If you currently pay $100 per month in sales tax, which is the average for median income households in Michigan, you’ll pay an extra $1 per month. Because the sales tax is regressive — it falls disproportionately on the poor — Proposal 1 evens the playing field by expanding the Earned Income Tax Credit, which was cut in 2011.

The fuel tax changes will result in an additional 2 to 10 cents per gallon, depending on gas prices. Some of these costs will surely be offset by reduced damage to vehicles as the roads are improved.

Governor Snyder’s FY 2015 Executive Budget projects that Michigan’s current 6% sales tax will collect $ 7.89 billion in FY 2015 on $ 131.5 billion in taxable products. This is $ 797 per year, per Michigan resident. The U.S. Census says that the average Michigan household is composed of 2.53 persons. Thus the current 6% sales tax is projected to collect $ 2,016 per household in FY 2015, or $ 168 per household, per month.  Not $ 100 per month.

Looking at FY 2015 as if Proposal 2015-01 was in effect, the 7% sales tax would collect $ 8.5 billion on $ 121 billion in taxable products. Keep in mind that road fuel will no longer be subject to the sales tax, so we have to back out S 10.2 billion in formerly taxable fuel sales on just over 4 billion gallons in road fuel. This is $ 855 per year, per person. Thus the proposed 7 % sales tax would collect $ 2,165 per household in FY 2015, or $ 180 per household, per month.

So the difference is $ 12 per month, per Michigan household. Not MLive’s $ 1 per month fantasy factoid.

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The Disaster That is Proposal 1

Sales Tax Retention on Off-Road Fuel Will Trigger Pandemonium in Michigan's Fuel Distribution Network

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Part I

Let’s walk through the numbers and consequences of the most disastrous aspect of Proposal 2015-01: the retention of the sales tax on fuels used almost everywhere but on the roads. Most disastrous because this will be enshrined in our Constitution if Proposal 2015-01 passes. No act of our Legislature or sleight of hand by our Governor can correct the Michigan Constitution if Proposal 2015-01 passes. They can only decide to impose astronomical costs on the petroleum distribution network, create a lot of new criminals, spawn a black market in fuels, forego sales tax revenues, or some combination thereof. The Michigan Constitution gets its first intractable dilemma.

HCJR UU contains the actual language amending the Michigan Constitution. Sales and use tax rates go from 6% to 7%, and the sales tax is no longer permitted on “gasoline or diesel fuel used to operate a motor vehicle on the public roads or highways of this state”. So the plain language of HCJR UU authorizes continued sales tax collection on all gasoline and diesel oil which is not used to operate a motor vehicle on the public roads or highways of this state, at the new 7% rate.

This 7% ‘ORV’ fuel sales tax will be over and above the motor vehicle fuel tax, which continues to be applied to recreational off-road vehicle and marine fuels as a ‘privilege tax’ under PA 451 of 1994. To make things even more confusing for fuel suppliers and consumers, there will be a third category of fuel subject to the sales tax, but not the motor vehicle or privilege tax: fuel used industrially, for construction, for farming, for lawn care, generators, and other miscellaneous purposes.

Less noticed, the 7% sales tax is also authorized on fuels other than gasoline and diesel oil used to operate vehicles on the public roads or highways of this state. This is quite a surprise since PA 468 of 2014, the motor vehicles fuels tax law of the road tax package, goes to great lengths to bring alternate transportation fuels such as liquid or compressed natural gas and lighter alternative petroleum products (LPG, propane, etc.) into the general road fuels tax regimen. This is significant; the U.S. Energy Information Agency estimates that these alternate transportation fuels currently account for about 6% of ground vehicle propulsion on the public roads in 2009 and their usage is increasing sharply. The sales tax liability on these ‘green fuels’ will put them at a serious economic disadvantage to gasoline and diesel fuel. But this did not deter the Sierra Club and their fellow environmental wackos from endorsing Proposal 2015-01. David Holtz and the Michigan Sierra Club board would appear to have a ‘Common Core’ reading comprehension level.

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Pavlov’s Politicians

Reflex Conditioning Drives Uncontrolled Government Spending

Pavlovs PoliticianThe brilliant, Nobel Prize winning physiologist Ivan Petrovitch Pavlov demonstrated that you could condition a dog to salivate by sounding a metronome. All he had to do was sound the metronome when putting out food for his dogs. It did not take long for his dogs to associate the sound of the metronome with food.  Then he no longer even had to put food out to get the dogs to salivate; he only had to sound the metronome.

Today, inferior rank politicians have been conditioned to salivate when a financial grant is offered by superior rank politicians. The only problem with these grants of largess is that they always come with caveats, and usually require matching funds. These restrictions are a deliberate – and successful – effort to frustrate all efforts to manage government expenditures.

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Michigan Political Math: $ 1.2 Billion = $ 1.08 Billion

Mass Transit Skims $ 120 Million from Proposal 2015-01 Road Work Funds

Train Wreck ImageEver hear of the Michigan Comprehensive Transportation Fund? Ten cents of every Michigan fuel tax dollar gets diverted to this mass transportation slush fund.  It is only just behind the sales tax as a diversion of your current fuel tax dollars from Michigan’s roads.

All motor vehicle fuel taxes collected in the State of Michigan are first deposited into the Michigan Transportation Fund. Then MCL 247.660 (1)(f) (Public Act 51 of 1951) dictates that 10% of the funds deposited in the Michigan Transportation Fund be immediately transferred to the Comprehensive Transportation Fund. The amended version of MCL 247.660 you are being offered in Proposal 2015-01 has the very same section (1)(f), making the same 10% immediate diversion.

So the $ 1.2 billion that Proposal 2015-01 supporters are promising you for road work is actually only $ 1.08 billion.  Kirk T. Steudle, P.E. gets a whole new stash to maintain and expand his stable of rotting train cars, $ 120 million that cannot be spent on the roads by law.  $ 120 million that gets skimmed from the $ 1.2 billion you are being promised for the roads.  And no, it is not skimmed from the $ 800 million that Proposal 2015-01 dedicates to the Democratic base.

Now you now know how Michigan political math works in the age of Common Core.  Pay $ 2 billion for roads, get $ 1 billion in road work.

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Another Glitch in the ‘Road’ Tax Package

Legislative Craftsmanship at its Finest

Crying CEO or managerA week ago we found out that the new road tax package vehicle registration fee system would end its Federal tax deductibility.  Now Gongwer News Service is reporting another glitch, this time in the gasoline sales tax provisions of the road tax package:

Fix Planned to Correct Sales Tax Problem in Roads Plan

The administration of Governor Rick Snyder will seek legislation to correct a potential problem in the road funding plan that as written would lift the sales tax off of gasoline only for motor vehicles, but not for boats, snowmobiles and other non-road purposes like generators and gasoline-powered equipment.

As currently constructed, that would create a mess for retailers who theoretically would have to determine whether or not to charge the sales tax and even ask customers filling up a gasoline can what the intended use of the purchase is. The Citizens Research Council of Michigan, as part of a broad analysis it is conducting on the road funding plan, noted the quirk and provided the information to Gongwer News Service.

It will be interesting to see how Governor Snyder fixes this.  Purchasing gasoline for your boat or ORV could become a really entertaining bureaucratic exercise. Ready for the ‘Gasoline Police’? Think of the new forms to be filled out.

CRCoM is a collection of the usual corporate interests orbiting Michigan government. Not certain why they would have ratted out this bungle to Gongwer, but it does suggest a certain degree of unease among the establishment.

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AgitProp in the 21st Century

Mercenary Research in the Service of Greed

News stories on the Michigan road tax proposal are replete with compelling, eye popping factoids about the costs poor roads impose on Michigan drivers. These factoids are so compelling that our colorless Governor cites them to sway voters in the upcoming sales tax proposal debate. Some examples:

  • An inadequate transportation system costs Michigan residents a total of $7.7 billion every year
  • Driving on rough roads costs Michigan motorists a total of $2.3 billion annually in extra vehicle operating costs
  • Driving on rough roads costs the average Detroit urban area motorist $536 annually in extra vehicle operating costs
  • Driving on rough roads costs the average Michigan motorist $357 annually in extra vehicle operating costs

You are expected to conclude that a 16.67% sales tax increase is a just trifle to escape these ghastly financial burdens. These factoids are always attributed to “TRIP, a national nonprofit transportation research organization”. Sounds like an independent, credible source – right? The adjectives ‘nonprofit’ and ‘research’ give you a high level of confidence in their pronouncements? Perhaps you should dig a little deeper than our conniving politicians and their lazy media scribes.  The TRIP report they are mining for these factoids is: MI_Transportation_By_The_Numbers_TRIP_Report_Jan_2014

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And why does this sound so familiar?

So, stop me if you’ve heard this one before:

“When you look at the last four years, we hardly did anything for working-class families as far as tax relief.” – Michigan State Senator Jack Brandenburg – January 2015 (from today’s Detroit News)

“What do I look like, an ATM machine here?” – Gov. Rick Snyder, September 2013 (AEI speech)

Ummmmm, yeah.

{And if wishes were horses, we’d all be eating steak. Continued after the fold}

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Michigan Chamber of Commerce (unwittingly?) campaigning for Mark Schauer.

 

What’s in your wallet?

This is Rich Studley.

Rich Studley is the President & CEO of the Michigan Chamber of Commerce.

If Rich doesn’t learn to shut up, he’s going to learn the hard way that this comments will not be so “well-received” as he might think, and instead be giving voters a huge incentive to vote for Mark Schauer next month.

Big Friendly Hint: Not something you want to do with an election as close as this one.

{More after the fold.}

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