We know what you are saying, “but our income tax is only 4.25%, and I’m sure that the State relies on our tax dollars, we need some sort of income tax to survive.” The first two part of those statements is true.
Michigan’s income tax is 4.25% and in 2014, Michigan received $8.75 billion dollars from income taxes. In fact, income taxes are 35.3% of Michigan’s tax collections, an extremely high number.
But let’s pretend that the roughly $8 Billion dollars were kept with Michigan families instead of taken by the government? Would we descend into chaos? Would the economy collapse? Not quite… If we cut out wasteful spending.
The State of Michigan is spending $54.9 Billion on their budget for 2016. $8.75 billion from income taxes covers a lot of this but let’s break down a few ways to save money.
- The Mackinac Center estimates that, ” If Michigan public-sector benefits were benchmarked to the average private sector benefit level, the state would save an estimated $5.7 billion annually.”
- According to the Lansing State Journal, The State spends $1.3 million on over 184 government meeting boards. Some of these boards do absolutely nothing and the fact that it costs over a million to run these boards is absurd.
Right there, the State can save roughly $6 billion dollars. The amount of money that is needed from income taxes could decrease to $2.75 billion, a 75 percent reduction. By doing that our income tax rate would be 1.06%!
An income tax rate of 1.06% is a good start, but by finding more wasteful spending we should be able to get our income tax rate to 0.