Wednesday, March 21, 2007

Will the Last One in Michigan Turn Out the Lights? 

Filed As:  Budget and Tax

It's a simple principle of economics: if you want less of something, you tax it more. So does the governor of Michigan want to accelerate the movement of people out of the Wolverine state?

Michigan has been a "leader" in economic stagnation. In the words of Dana Johnson, chief economist of Comerica Bank, it is still in a "one-state recession."

Governor Jennifer Granholm would like to address the situation by imposing a 2 percent tax on services. Many business owners are troubled by the move, as well as the editorial board of the Wall Street Journal, which said that the proposal was equivalent of setting up a web site called "MoveOnOutofMichigan.org."

The Michigan-based Mackinac Center for Public Policy agrees, saying that Michigan government needs to be downsized: "Michigan maintains government and public school establishments whose costs not only far exceed the private sector, but even the public sectors of other states."

The new tax would kill 19,000 jobs, says the Center, which has come up with a suggestion of how state spending can be trimmed by $1.8 billion.

Much has been made of the troubled fortunes of the auto industry. True enough, the "Big 3" have made their mistakes over the years. But for too long, policy makers have used the plight of one industry as an excuse for creating and maintaining a state government that simply demands more from the economy than it can support.

It's no wonder that Michigan leads the nation in out-migration.

Tax your people, and their economic prospects away, and they leave. The governor's plan will increase the number of ex-Michiganders.

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