Saturday, October 6, 2007

Truth and consequences

"Michigan is a high tax state. Any new tax is bad and scares away business. We need to make cuts and reforms to move Michigan ahead," say some.

"Michigan has an average tax burden. New taxes are required to maintain essential services because the economy has changed. The decline of the auto industry requires a reconfiguring of our tax policy and structures. What seem like new taxes are not additional taxes. They are making up the loss that resulted from our changing economy," say others.

The two positions are not equally valid. One takes into account the real changes to our economy, the other does not. One is ideological, the other rational.

No one likes new taxes. But the agreement reached in the eleventh hour on Monday has flaws, in particular the service tax on consulting. Consulting has become a large part of our economy and is knowledge-based. The auto companies rely heavily on consultants in Michigan as a part of outsourcing. The new tax builds in a competitive disadvantage for companies serving this need, according to non-partisan analysis of the Citizens Research Council.

"Michigan faces many challenges. Michigan needs good news. Michigan needs a sense of self and hope and possibility," say all.