Studies

Advancing Civil Society: A State Budget to Strengthen Michigan Culture

At its core, the budget of the state of Michigan is not about money-it is about people and the way they organize their society. This line-by-line analysis of Michigan's 1995-96 state budget reflects a principled vision for Michigan culture by asking this question about each budget item: Should this program or activity be done by the authority of the state and financed by taxes, or should it be done by its individual citizens acting in voluntary cooperation and private contract with one another? The study recommends over $2 billion in spending reductions (over 7 percent of the state budget) achieved by eliminating unnecessary and counterproductive programs, rolling back unjustified program growth, and contracting out for services that can be handled more efficiently by the private sector. This landmark analysis will help citizens, candidates, and officials of any state craft budgets that promote the strengthening of private institutions and civil society. 97 pages. … more

Sales vs. Income Taxes: The Verdict of Economists

The March 15, 1994, statewide ballot question asked voters to weigh the pros and cons of school finance. The central question was this: Which does the least economic harm-the sales tax or the income tax? Economist Dean Stansel maintains that theory and empirical evidence suggest that consumption taxes are less deleterious than taxes on income, investment, and savings. Connecticut imposed a new income tax in 1991 and economic growth evaporated and job opportunities and population declined. We should learn from the experience of states with high income taxes. 9 pages. … more

A Prosperity Agenda for Michigan Cities

Introduction by David G. Sowerby

This study compiles recently released 1990 U.S. Census Bureau data to measure the economic and fiscal policy performance of Michigan's eleven largest cities. Using an index composed of poverty rates, population growth, job growth, and per capita income, the authors find that six cities grew during the 1980s while five declined. The per capita tax burden was found to be 65 percent higher in the declining cities than in the growing cities, a difference of more than $1,100 per year in taxes. Preface by prominent Michigan economist and Mackinac Center scholar David Sowerby. 19 pages. … more

Proposal A: An Analysis of the June 2, 1993, Statewide Ballot Question

In 1993, Michigan voters were asked to consider a plan that would cut property taxes and cap property assessments, raise the sales tax, and establish a $4,800 per-pupil guarantee for the public schools. "Proposal A" was defeated, but not without intensive debate in which this study figured prominently. The report identifies both pros and cons of "A," including independent, in-depth analysis of its likely impact on the state budget, schools, and property owners. Although "A" is now consigned to the history books, this study is a useful tool for understanding school finance, the economics of property taxation, and related constitutional questions. 40 pages. … more

Analysis of Tax Proposals on the 1992 Ballot

The November 1992 general election in Michigan included two propositions regarding property taxes, Proposals A and C. This evaluation presents a detailed analysis of them, including projections for state and local government revenues. Widely cited in the press when released, it remains a useful guide to Michigan's property tax structure. The report makes a strong case that Michigan, which has the second highest property tax burden among twelve Midwestern states, sorely needs a property tax cut to spur economic growth and to stem the exodus of business from the state. 44 pages. … more

Road Map For a Michigan Renaissance

In the aftermath of the 1990 gubernatorial election, innovative proposals for a new incoming administration and legislature were needed. In a 20-point program, The Mackinac Center calls for a Michigan Grace Commission, welfare reform, trucking deregulation, privatization, repeal of the Prevailing Wage law, and specific tax and spending cuts. … more

The Single Business Tax Burden on Michigan Industries

The Michigan Single Business Tax (SBT) was, at the time of this report's release, the only value-added state business tax system in the U.S. The author explores its history, actual practice, and inherent advantages and disadvantages. Tables of data are provided, showing the SBT burden as a percentage of the Adjusted Tax Base on industries in Michigan. This report is a good overview of the SBT and its impact on the state's businesses. 30 pages. … more

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