Taxation to Make Benefit Most Glorious State of Michigan!

January 25, 2007

Please excuse the lame Borat reference in the title of this post.

Of all the dubious, questionable, counterproductive, and downright backwards economic advice I’ve ever heard, this suggestion, from the Michigan Infrastructure and Transportation Association has got to take the cake:

[S]pokesman Mike Nystrom says MITA hopes to sell lawmakers and drivers on a 9-cent gas tax increase… raising the 15-cent-a-gallon diesel tax by 4 cents a gallon… also is pushing for increased state fees for registering and licensing vehicles… as much as a 50%.”

It gets worse: Nystrom says, “We think this is something that could help pull Michigan’s economy out of the doldrums…”

We don’t need a bazillion acres of the second-most scarce resource known to man, lying idle from now until infinity – so sell some of the millions and millions of acres worth of state land. Lakeside/creekside condos are nice, tourism is a boon for the economy. If you’re worried about conservationism, then just throw in some deed restrictions and limit the development in that manner. It’s a one-time injection of cash, plus an annuity in the form of property taxes.

So the problem appears to have an easy solution, which would also be amenable to vacationers, businessmen, real-estate agents, homebuilders, surveyors, developers and so on. But I’ve strayed. What I’m really curious about is this: How does taxing the citizens of the state of Michigan (i.e., making their disposable income smaller) help the economy? How will a gas-tax hike, or an increase in DMV fees help Ford, which lost nearly 13 Billion dollars last year? The price of gas also does not discriminate by socioeconomic status – in this regard, its regressive. Additionally, the price of gas affects the prices of pretty much every tangible good in existence; and this increase will also be borne largely by the consumers, many of whom in Michigan are suffering from decades of Big Labor incompetence. You’d be hard-pressed to convince me that we’re not in the running for a new Toyota manufacturing facility because our roads are bad.

Because if taxing people really is the solution to creating wealth, we can pretty much erase the entire history of economic theory and start over.

The smart money, however, is on history – not MITAs pipe dreams.


Comments

2 Comments so far

  1. Anonymous January 26, 2007 2:02 pm

    If the state just sold all that land and we built condos and developed the land we would end up with a bigger transportation problem.

    The nine cent increase won’t even be enough to repair the current state transportation system.

    I talk about the NEED for the increase as a START at http://gastaxincrease.blogspot.com/

    Transportation investment CAN help economic growth its just difficult to measure (like adverising on american idol).

    The transportation system is an overlooked asset. WE use it everyday to go to work, to shop, to socialize but we are never willing to pay.

    Gas tax revenue and vehicle registration fees are the big funders of a system. We need a system that charges a user fee so that those who benefit the most from the system, pay the most. I think it is Oregon where they are experimenting with this currnetly.

    To have a viable transportation system, we need money. Would you rather pay an extra nine cents per gallon or .75 cents everytime you get on I-94 for a toll.

    The interstate changed american society and the way our cities developed.

    OK I’ll stop. I hope you’ll read my thoughts on my blog. A conversation would be nice.

    Ryan

  2. doinkicarus January 28, 2007 11:06 pm

    I’d prefer privately constructed, funded, operated and maintained roads. If the government is capable of operating toll roads, and it is, then there is no reason why astute entrepreneurs can’t do the same.

    Since that’s far from realistic, I’d prefer localized funding. Each city is responsible for maintaining the roads within its borders. How they choose to raise the funds and allocate resources is up to them, but I imagine we probably wouldn’t see competing gas-taxes that varied from city to city, but rather an increase in property taxes. If you want to live in a city with nice roads, or own a business in a city with nice roads, then you should have no problem paying for a portion of those roads.

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