Every spring, I recall the irony of that old joke about how the IRS got its name: Take the words "The IRS" and put them together. It equals "THEIRS!"
These are the months when we pass two annual milestones. First, on April 15, you check off tiny boxes and fill in your vital statistics on forms you no longer even try to understand-and presto, a huge chunk of your annual incomes goes off somewhere to be spent on something or other by someone other than you. After agonizing right up to tax day, you experience a rush of relief after those big envelopes are in the mail to Lansing and to Uncle Sam.
But not so fast. My organization, the Tax Foundation in Washington, D.C., has discovered that Michigan's "Tax Freedom Day"-the day of the year when Michigan citizens finish paying for local, state, and federal government-extends two weeks beyond April 15, to April 29.
Think about that for a moment. It's as if from the beginning of the year until April 29, you worked full time just to pay the costs of government. All the rest of your major expenses-car payment, house payment, college tuition-must come from the income you earn during the rest of the year. America's Founding Fathers would find this astounding. And what would amaze them more than the tax burden would be the fact that Americans consent to such an arrangement.
Like the old story about boiling a frog-who roasts contentedly in the pot provided the heat is turned up slowly-Americans have become accustomed to thinking high and ever-rising levels of taxation are normal. Sure, there have been brief reprieves in the upward trend, such as President Reagan's income-tax cuts in the 1980s and Michigan's Proposal A property tax cut in 1994. But in the long run, tax increases have always overcome the cuts.
Just where do Michigan citizens rank on the Tax Foundation's tax burden scale? As the Mackinac Center has pointed out, it's probably higher than you think. Michigan has a higher overall state, federal, and local per-capita tax burden than California. In fact, in total tax burden Michigan places 11th, ahead of 39 other states-including Massachusetts, a state notorious for high taxes. Count just state taxes, and Michigan's per-capita tax burden rises from 11th to 6th place nationwide. Measured per $1,000 of income, Michigan's burden of state taxes rises to 5th place, despite Gov. John Engler's vaunted 30-odd tax cuts.
The federal tax burden also has increased for Michigan citizens. In terms of straight dollar amount, Michigan's per-capita federal tax burden was $7,743 per person in 2000, $7,791 in 2001, and will come to $7,955 in 2002-all slight enough increases to keep us frogs from leaping out of the water. And as a percentage of the average federal tax burden facing the states since 1990, Michigan's burden has risen from 98 percent of the average to 102 percent.
Michigan's experience doesn't mirror what's been happening in neighboring states. Ohio's percentage of the average federal tax burden fell from 91 percent in 1990 to 90 percent in 2000. Indiana's was 88 percent in 1990 and only 89 percent in 2000. Even Wisconsin suffered just a 2-percent increase-92 percent in 1990 and 94 percent in 2000-compared with Michigan's 4-percent increase over the same period.
Meanwhile, what are Michigan citizens getting back from the federal government? Of course, the government does some things with our tax dollars that deserve our gratitude and respect. But there are many other things that don't-such as the 7,803 pork-barrel items in last year's 13 federal appropriations bills, an all-time record. For example, Ron Utt of The Heritage Foundation has found a tattoo removal program in California ($50,000), an effort to "cure `goth culture'" in Missouri ($270,000), "therapeutic horseback riding" in Apple Valley, Calif. ($150,000), and a $4 million "dolphin replacement" program in Washington state.
So if you're feeling a little put upon this year; if you're wondering why government needs so much of your money; if you're a little vexed at some of the stuff politicians are spending it on, it's no wonder. Michiganians are among the most heavily taxed citizens in America. If anyone's entitled to feel put upon, you are.
(Scott Hodge is executive director of the Tax Foundation, a Washington D.C.-based nonpartisan tax education and research institute. Permission to reprint in whole or in part is hereby granted, provided the author and his affiliation are cited.)