Tag Archive for Michigan Sales tax Hike

Cronyism, Elections, Humor in Michigan, Michigan, Michigan Politics, Opinion, Proposal 15-1, Taxes

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

by  •  • 3 Comments

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.

READ MORE ►

You Betcha! (19)Nuh Uh.(0)

Cronyism, Elections, Michigan, Opinion, Proposal 15-1, Rent Seeking, Taxes

Roads are a Healthcare Issue, huh?

by  •  • 1 Comment

OK, Slick Rick, here’s an $18,000,000,000.00 “insurance policy” waiting for fixing only roads.

So, Snyder’s goal is to protect the insurance industry lobby? Rick Snyder and Brian Calley have a huge credibility problem, yes?

Gilligan's IslandAnd, Snyder is wasting our money on his frivolous River of Opportunity Lake of Lobbyist special interest payola pursuit of this universally despised constitution tampering disaster Proposal.

You Betcha! (21)Nuh Uh.(0)

Elections, Michigan, Michigan Politics, Proposal 15-1, Taxes

The Disaster That is Proposal 1

by  •  • 3 Comments

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

ORFUTU-nerd-RM

Part II

As Proposal 2015-01 stands now, ORV operators, snowmobilers, boaters, lawn mowers, generator users, and others purchasing non road use fuels from gas stations will be in violation of PA 167 of 1933, the Michigan sales tax act. The way PA 167 of 1933 is worded, compliance is primarily the responsibility the fuel retailer. However those who, for whatever reason, escape paying the sales tax become liable for the Michigan use tax under PA 94 of 1937. This includes tourists who trailer in fueled boats from out of state. The ‘Amazon tax’ returns with a vengeance in a new guise.

Barring further convoluted legislative action, on October 1st Michigan gas stations will have to collect the 7% sales tax on gasoline and diesel fuel sold for any purpose other than propelling a vehicle “used to operate a motor vehicle on the public roads or highways of this state”. Seems simple enough given the electronic calculation capabilities of most modern gas pumps, right? Just push a button and the sales price increases by 7%.

Wrong.

READ MORE ►

You Betcha! (25)Nuh Uh.(1)

Cronyism, Elections, Michigan, Michigan Politics, Proposal 15-1, Taxes

The Disaster That is Proposal 1

by  •  • 4 Comments

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

tall-sign
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.

READ MORE ►

You Betcha! (28)Nuh Uh.(0)

Elections, Michigan, Michigan Politics, Proposal 15-1

Northern Resistance

by  •  • 9 Comments

Two Northern County parties on record in opposition to proposal 15-1.

STOP-167Antrim and Grand Traverse County Republicans have said “nope.”

Last Thursday (February 5, 2015), a couple of Northern Michigan county conventions had the opportunity to vote on a resolution in opposition to the 17% sales tax increase.  With only ONE dissenting in the Antrim County convention, and NO vocalized dissent in the Grand Traverse County convention, both county Republican parties made it clear that the tax increase was unacceptable.

The GTGOP event had about 70 voting delegates present. Antrim had 43 signed in

READ MORE ►

You Betcha! (20)Nuh Uh.(2)