What Number is Fair to Michiganders?
According to the Michigan Department of Treasury, in 2012 the top 1% of Michigan earners paid 15% of our total state income tax collected and the bottom 33% of Michigan earners received $245 million more than they paid in.
Are those numbers fair?
The top 1% of earners in Michigan are those classified as earning more than $500,000 a year, and the bottom 33% had incomes of $16,000 or less a year.
You could argue that the bottom 33% of income earners in Michigan receive a full refund of the income tax they paid, but should they receive more than they paid in, essentially welfare?
If you are interested, the state collected about $7 billion dollars in state income taxes in 2012. I must admit that is less than I thought — considering we had a total (state and federal dollars) budget of approximately $48 billion that year.
According to the article and the Michigan Department of Treasury, 4.6 million people filed state income tax returns in 2012 and of those 1.5 million people were in the bottom 33% of earners and just 0.7% were in the top 1%.
According Michigan Treasury spokesman Terry Stanton, the Homestead Property Tax Credit (HPTC) and the Earned Income Tax Credit (EITC) accounted for the $245 million in refunds.
State Rep. Jim Townsend (D-Royal Oak), the Democratic vice chairman of the House Tax Policy Committee, believes people should consider more than just the state income tax when looking at tax equality.
"As you know, the income tax is one of many taxes that individuals in this state pay, we have property taxes, the sales tax, excise taxes like the fuel tax, sin taxes, and the income tax. When you add it all up, the bottom 80 percent of households, those making $88,000 or less, contribute nearly twice as much of their income in state and local taxes as those in the top 1 percent," Townsend told the Michigan Capitol Confidential.
Again, I ask you, what is a “fair” percentage that the hated top 1% of producers in Michigan should pay?
Should all taxpayers contribute something towards the funding of running our state?
If you believe the bottom 33% should get a break, should they also not be paid to live in Michigan?
If a large percentage of taxpayers of Michigan pay nothing, and in fact are paid to live in Michigan, how do we expect that they will care how the people who actually pay state income tax money is spent?
Let’s discuss this today on my show The Live with Renk show, which airs Monday through Friday 9 a.m. to noon, to let me know your thoughts at (269) 441-9595.
Or please feel free to start a discussion and write your thoughts in the comment section.