In case you don’t know the state of Michigan has been going through tough times recently. We have the second highest unemployment in the United States, in fact employment is near depression levels. We are in the top 3 states when it comes to people facing foreclosure on their homes. At the same time the state was hugely in debt.
The government of course have been making moves to try and get out of this mess, such as trying to lure in new business to fell the void lift from the fleeing auto industry.
Something that has been in the news recently is the fact that Michigan faced a shut down because the state’s house of reps had a long out battle of the best way to balance the state’s budget. Most of the Republicans wanted to cut programs and most of the Democrats wanted to raise taxes. During the end the state didn’t close and they came to an agreement to both raise taxes and cut programs (so we get the worst of both worlds).
The fact that Michiganers now have to pay more in taxes has many living in the state upset. Many small businesses fear a down turn on business because the sales tax has been extended to cover many services. Of course there are also people upset over the fact that they now have to pay more in income tax.
I honestly don’t care much about the people getting angry over their increased income taxes mainly because Michigan will still have some of the lowest income tax rate in the nation (I think we are around 36th). In some ways I think the raise in tax is really just the market correcting it self via increasing it’s revenue to cover it’s expenses.
But giving the fact that Michigan has such a low employment rate right now I am not sure if expanding sales tax to cover a number of services is really the smart thing to do at this time. Most jobs are created by small and middle-sized business and by expanding the sales tax on these business people will spend less on them, which would lead to a slow down (or even a shrinking) of their business.
If anything this is a time that the Michigan government should be looking at what it could do to increase business in it’s state. Instead of expanding the sales tax, maybe the government should have looked at ways that it could lower fees that small and medium sized businesses face. Thus lowering their cost, which would help the business already in the state of Michigan as well as maybe draw others, which would be good for the state’s economy.
Wednesday, October 24, 2007
Was raising taxes the right thing to do in Michigan?
Wednesday, October 17, 2007
Reaganonomic Healthcare
With the election season up and running there has been the standard talk from Republicans about Reaganomic tax cuts and some on the Democrats side wanting to push socialized healthcare. And of course both sides are in disagreement over these issues.
But the odd thing is that these two have a bit more in coming then people think. One of the key thinking behind Reaganonomics is the ideal that by cutting taxes the economy will get a boost by all the money people save from not giving to the government.
On the other side on one of the key points brought up from those who support the ideal of universal healthcare is that even though taxes will more then likely rise people will save much more money by the fact that they wouldn’t have to pay their health insurance bills. This in turn would boost the economy because people would have more money to spend on other things. Also American business will be more productive and can better compete with companies around the world by having lowered cost to run their business due to not having to pay employees healthcare.
Do you see the connection?
People supporting both ideal theorize that are economy will go up if we follow their ideal and for nearly the same reasons. If we have more money in our pockets we will spend more.
And this is where I am confused. How can a side that so strongly favor Reaganomics because they say it will be good for the economy by allowing us to keep more of our money not favor socialize healthcare, which would also be good for economy by letting us save money?
Is it the taxes? Are people so focused on the thought that taxes might go up a bit that they over look the fact that you will save much more money from not having to pay hundreds of dollars on your health insurance bill every month?
I think a big problem is branding. Many that support Reaganomics do so because they like the ideal of paying less money in taxes. They are also against the ideal of socialized healthcare because of two ideals. First the ideal of increased taxes and second many of these people lived through cold war and have them ingrained in them to reject anything thing that even slightly smells of socialism.
To get past both of these negatives I think people hoping to both boost the economy and making sure people in America are healthy through a universal healthcare system is to try and move away from the socialism brand and tie universal healthcare to something that those opposed to it like. And I think that is Reaganomics.
Instead of calling it Universal or Socialized brand it Reaganomic Healthcare and people on the right will jump for it.
Saturday, October 13, 2007
A sales tax on the price of freedom
On October 2nd or so a few members Democratic of congress purposed a bill to raise taxes to help cover the cost of the war in Iraq. People on both sides of congress quickly shot down the bill, but if it did pass and you are of middle or lower income you would have had only to pay an extra 2%, but if you where wealthy you would have had to pay an extra 15%.
I know must of you reading this will feel a nice breeze of relief hearing that this bill didn’t become a law because nobody likes to pay taxes and even more so they don’t want to have to pay even more in taxes. But the truth is that economically this bill made some sense on two factors.
The first factor makes since for those who want to end the war in Iraq. At the moment unless you are or know someone fighting in the war then there isn’t really much of a direct price you pay for this war right now. But if this tax did come in to being you of course would be effected by this war and that of course would make more people think about it. People think harder about things they have to pay for if it’s free (or seems free) they we take any crap. Once a price tag is fix to it the very same goods we judge it and ask…“is it really worth it?” It very, very likely that some of the same people who support the war (and even those who don’t think about it) now that wouldn’t if they had to pay extra in taxes for it. and in all likelihood they while start to become vocal (or more vocal) about it and ask for the war to end.
The other factor doesn’t really matter if you are for or against this war but with the truth that hardly gets talked about. “How are we going to pay for this war?” Right now, we are getting deeply into more and more debt because of this war. IF we don’t want this country to fall to far into the hole and risk the chance of being stuck in the position to have to pay billions of dollars to other countries just to pay off our nations credit card bill in the future we need to be a bit more fiscally balanced. When it comes to this war we really need to start to PAY FOR AS MUCH AS WE CAN NOW INSTEAD OF LATER.
Now I don’t know if this ideal would be the best way but at least it would cover are bill now instead of having us (and maybe even are children and grandkids) pay for it in the future. If we don’t go with a tax but still fill we need to pay for the war instead of getting in debt because of it, we could go with things like war bonds. Besides we could use new cartoons that slip in war bond jokes that kids today would understand (Bugs Bunny your nation needs you right now.)
is it odd of me that I think woman that can talk about business and economics are extremely sexy?
and if you are one of these woman call me so we can go out and talk a little econ over dinner.
I think the invisible hand of the market just groped me.
No really I just felt someone grab my butt! freaking prevy free market
bailout directory
