LLR Pages

Saturday, September 29, 2007

The Continuing Michigan Partial Shut-Down Mess

The continuing saga of the partial shut-down mess in my home state proceeds unabated. Apparently the Michigan media is saying that there has been some progress in the talks regarding the shut-down nonsense, but that doesn't say much, as far as I'm concerned.

My governor Jennifer Granholm is not wasting any time trying to blackmail the Legislature into hiking the state's flat income tax rate from 3.9 percent to either 4.3 percent or 4.6 percent, whichever is decided first. She claims to be pushing the tax hike in the state to "close a $1.75 billion gap in the budget," yet she offers no proof that raising the tax rate is going to rectify the mess that the state's in -- a mess that Granholm and the Democrats largely created for the state.

Since she's not even remotely interested in slashing the spending, tax, and regulatory levels statewide, the chance of an impending financial implosion in this state is becoming greater with each passing moment.

Not only does Jenny want to raise the flat income tax, she's also trying to redouble on her efforts to push for an extension of the state's sales tax (which is 6 percent) to services currently not covered under the law, such as movie tickets, performing arts, accounting services, etc. (There's a litany of other services that are targeted to be taxed under the new extension, but that's not a surprise.)

The real answer to this insanity is to dramatically slash spending, taxes, and regulations, many laws that impede in the market process, and truly privatizing many government services and functions that can work better in a laissez-faire free market. A "right to work" law is seriously needed for Michigan, considering many other states do have such laws on the books and their economies are doing far better than states that don't carry them. If the Legislature and the Governor were to sign and pass such a law, there would be a significant turn around economically and financially.

Until such legitimate reforms are implemented, the state will not survive the financial and economic implosion that is yet to come. Even if the Legislature, Granholm, and the special interests get their way, the "fixes" -- that is, the Democrats' beloved "balanced budget" -- will pave the way for the Legislature to boost spending, which can, in turn, lead to higher taxes again. The cycle would just keep continuing. The state will not survive it at the rate it continues to go.