LANSING – A combination of tax policy changes, economic factors and demographic changes means Michigan ranks in the lower tier of all states in terms of per capita tax burden, a report from the Citizens Research Council shows.
The report, which looks at data from 2013, shows that Michigan residents had overall tax burdens similar to states considered low tax states such as Utah, Montana and Washington when looking at the state and local tax burden of $1,000 of personal income.
Michigan also had lower overall per capita taxes than the other Great Lakes states, the report said.
Even Michigan’s property taxes, long blasted for being high, were 26th in terms of per capital total burden. When considered on the basis of property taxes per $1,000 of personal income, the state was slightly above the national average but ranked 18th overall (in 1983, the state ranked 5th nationally for property taxes).
The total state and local tax burden on the state amounted to per capita of $3,750.40 in Michigan, the report said, compared to a national average of $4,598.77. That put the state 35th in total ranking, the report said.
The state’s tax situation was affected by several factors, the report said. Few changes to the tax structures mean state and local governments are basically levying the same rates on lower overall tax bases.
The state’s tax bases have been affected by its economic slowdown through the first decade of the 21st Century, topped off by the Great Recession, which hammered personal income in the state that lowered both income and sales taxes. The collapse in property values hurt local governments which are dependent on property taxes, and the Headlee Amendment limited the ability of local governments to make up for lost revenues.
In 1993, according to the report, property taxes in Michigan were more than 41 percent of its total tax burden, and by 2013 they were just over 31 percent.
Sales tax revenues went up dramatically following the increase in the tax approved in 1994 as part of the Proposal A school finance changes – in 1983 they were 21.8 percent of the state’s tax burden, in 2013 that had increased to 34.1 percent – but on a per capita basis the state ranks 32nd in terms of the average sales tax burden among the other states.
In terms of the income tax it went from 31.6 percent of the Michigan overall tax burden in 1983 to 26.9 percent in 2013. And nationally, the income tax ranks 34th among all the states with an income tax burden more than $200 less than that the national average.
And in terms of corporate income taxes – changed dramatically after Governor Rick Snyder took office in 2011 – the state went from 5th highest in 1993 to 39th highest in 2013, the report said.
This story was published by Gongwer News Service. To subscribe, click on www.gongwer.com
