New Census Bureau data published today confirm a trend shown in previous releases: While the amount of tax revenue flowing into the Michigan treasury has fallen, the state's tax trends look brighter than the state's economy.
From 2008 to 2009, Michigan's tax revenue fell 4.9 percent. However, its number of payroll jobs fell by 6.9 percent.
Furthermore, although this state lost more total jobs than every state except two (Nevada and Arizona), 32 other state governments experienced larger declines than Michigan's in their tax receipts. On average, state tax revenue was down 8.6 percent.
These facts directly contradict claims that the state tax system is "out of sync" with a 21st century economy, "inefficient," or "failing to provide stable revenue." Indeed, the figures show that if anything Michigan's tax system is efficient at extracting more dollars out of a dwindling employment base.
Lansing politicians, government employee unions and others are desperate for a tax increase so they can avoid state spending reductions and reforms, and will do and say almost anything to get it. Misguided efforts by others to undertake a "restructuring" of the state tax system are already being used as a smokescreen to hide a tax increase.