If Sales Tax is Passed, Michigan Would Have the Second Highest in the U.S.
If Michigan voters approve a proposed sales tax increase that will be on the ballot, it would give Michigan the second-highest state sales tax in the country, trailing only California.
According to the Tax Foundation, California has the highest state-level tax rate at 7.5 percent. Five states (Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee) have the second-highest state sales tax at 7 percent. Michigan’s current sales tax is 6 percent.
As part of a compromise made by the Michigan House and Senate, a deal was made to let voters decide May 5, 2015 if they want to increase the sales tax by 1 percentage point. That would generate $1.34 billion. About $807 million of that $1.34 billion tax increase will go to the School Aid Fund, which pays for K-12 and higher education. That $807 million would replace the $530 million earmarked for K-12 education that would be shifted to pay for roads.
“It’s another way to make life a little bit worse for Michigan citizens,” said Leon Drolet, chair of the Michigan Taxpayers Alliance.
Jim Chiodo, a member of the Ottawa County Patriots, said he was part of a campaign to email their political representatives in opposition to any tax increase. He said they felt before the compromise deal was made that the politicians weren’t listening. And, he said, that was what came true.
“We steadfastly believe that there is more than enough money to pay for road repairs without raising taxes at all,” Chiodo said in an email. “The key is to prioritize spending.”
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.