Opinion | Michigan’s tax system is unfair to our essential workers

Tax day arrived last week in July instead of April, and millions of Michiganders were reminded of the deep inequality in our tax code and our society. While far too many people have died, lost jobs, small businesses and a sense of community, too many others have profited handsomely – even during this pandemic.

 Jeff Irwin is a Democrat senator from Ann Arbor

Imagine two different people in Michigan. First, a grocery store worker who didn’t get paid sick days even during a pandemic. Instead, they were deemed essential and had to report to work to keep food on the shelves for families who were cooking more at home and therefore shopping more. All of this led to longer hours while working with the unknown of the virus possibly getting them or their family sick. 

Now take one of Michigan’s many billionaires. They did not have to put their lives on the line to ensure others ate. These billionaires continued to get richer as the stock market, which has become disconnected from American life, soared to new heights even as jobless claims broke records.

It’s clear that the two people in this example live completely different lives. One works hard to just survive, one does not need to work to get richer. One is deemed essential and is forced to work while the other isn’t deemed essential yet still has the means to do whatever they choose. 

However, on Tax Day in Michigan, suddenly both are treated the same. The grocery store worker, the nurse, the truck driver and warehouse worker who kept both our economy and society going are forced to pay the same tax rate as billionaires who did not have to lift a finger during the crisis. 

This unequal system leads to more division, more poverty and ensures Michigan does not have the revenue to fund our schools or fix our roads. People across our state get this as a recent survey found 77 percent thought we should “increase taxes on the wealthiest individuals in Michigan.”

As the legislature comes back for session we should take action to adopt a fair income tax that ensures the people who go to work day in and day out are not forced to pay the same tax rates as billionaires. This system would add a level of fairness to our tax code and allow us to raise the revenue needed to fund things like education, roads and health care.

Let's make this past Tax Day the last one where those who earn their wages pay the same rate as those who just profit off others’ essential work.

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Comments

Kevin Grand
Fri, 07/24/2020 - 7:23am

The Bridge should have titled this piece from Michigan State Sen. Irwin 'Why I support a wealth tax, and so should you!"

Since the democrats were the ones to push the concept of an income tax here in America in the first place, why are they so surprised at its outcome?

Speaking of being surprised at the eventual inevitable outcome...

https://www.forbes.com/sites/kenrapoza/2020/06/11/new-york-realestate-mi...

Bones
Fri, 07/24/2020 - 12:36pm

Look, we get it: You hate the poor and have a child's understanding of taxation. You don't have to remind us daily.

As for selfish New Yorkers fleeing for Florida so they don't have to support the common good, it's not really something to cheer about, especially given the dire conditions for the average worker in Florida. A state whose tax code exists entirely to cater to nonproductive retirees is not a sustainable strategy

Kevin Grand
Fri, 07/24/2020 - 8:13pm

Not even close there, Bones!

What I will say that I hate about all of this, is just how people are so easily fooled by these charlatans invoking the same "promises" over and over again, with the same predictable and disastrous results.

I've heard this VERY same song and dance Sen. Irwin is trying to use (yet again) in order to garner votes.

https://thehill.com/policy/finance/452902-2020-democrats-push-tax-hike-o...

Look, you can either learn from the lessons of history on why this doesn't work, or you're just doomed to repeat it all over again and waste everyone's time picking up the pieces from your folly.

It's that simple!

https://mises.org/power-market/democrats-push-wealth-tax-heres-why-other...

Larry
Fri, 07/24/2020 - 10:35am

Mr. Irwin --- Our state tax rate is 4.25%. Let's not forget that 4.25 % of $50,000 is $2,125, and 4.25% of $1,000,000 is $42,500 . . . 20 times the lower figure. Don't make little of the fact that the rich DO pay a lot more now.

middle of the mit
Fri, 07/24/2020 - 2:14pm

Larry,

Could you please stop playing semantics. Percentages are percentages. If you pay the same percent it is the same.

I would argue that the person who makes $50,000 and paid $2125 could use that money more that the the person making $1,000,000.

Also, you say that the person with the million dollar income pays 20 times the amount of the person making $50,000.

How many times does 50,000 go into 1,000,000? You make more..........you pay more. You could always take a pay cut and maybe inflation would start to drop and costs could come down on products and it wouldn't cost as much to replace our roads and dams.

It used to be before the tax cut kings got into office that employers would give out bonuses and raises at the end of the year because they would rather that money go to their employees instead of being taxed and taken by the Government. Now they just shove it off shore where it doesn't really do anything for the economy.

But hey!!!

Tax cuts help the economy!!!

Remember that next time you buy a new car and wonder why all the jobs are in China and Mexico yet the costs for your car still goes up and you still blame that on the health care costs and the wages while not even blinking an eye at the 10's of million dollar salary and 10' of million dollar bonuses executives receive.

That doesn't cost you anything..........does it?

Ha ha ha ha!!

Sharon F
Fri, 07/24/2020 - 1:59pm

Governor Whitmer is doing a great job for Michiganders at all levels I hope she keeps up the good work

Chris H
Fri, 07/24/2020 - 3:18pm

My wife and I are high earners (as a couple with two good incomes) and highly educated. Our parents and my step parents were teachers, professors, doctors, lawyers, psychologists and home makers with a decent mix of conservatism and liberalism. In both homes we were raised under the credo that "much is expected of those to whom much is given" either unspoken or, in one case, plastered on the refrigerator door. The "much is given" part meant a great education, access to opportunity, a home life that fostered ambition and the sensitivity to understand and sympathize with the plight of others less fortunate. A millionaire paying the same tax rate as an essential worker making $38,000 a year doesn't adequately address the "Much is expected" part of the credo. After WWII the highest effective tax rate on the richest Americans was 91%. And still America was an environment where hard work and entrepreneurship were lucrative and people were sufficiently motivated to get up and go to work. I'm not saying it should be 91% now. We need higher income folks to convert their thinking so that they understand that they're paying a "standard rate" (which needs to be higher right this minute) and essential workers like Jeff references in his piece get discounts from that standard rate that are proportional to their massively lower incomes and maybe even relative to their essential contributions. $50,000 instead of $42, 500 on your $1,000,000 doesn't impact your survival the way an extra $500 in taxes would hurt a person making $50,000. Much is expected of those to whom our society has fostered and allowed to flourish. Also, Trump's tax breaks helped me - I didn't need it and I neither earned nor deserved it. IMHO

Bob
Mon, 07/27/2020 - 8:32am

Chris, you may want to acquaint yourself with the difference between a "marginal tax bracket rate" and an "effective tax rate". Those two terms are non synonymous. The 91% tax that you reference was a marginal tax bracket rate. And what your reliance on that tax bracket rate fails to take into account is the fact that at the time of such tax bracket rate, there was a dramatic list of deductions that drove the "effective tax rate" well below what you describe.

The effective tax rate for the highest incomes in the 1950s was about 42%.

Facts are important.

Elsie Anne
Sun, 07/26/2020 - 1:53am

I've always wondered why the Federal Government has a graduated income tax and Michigan doesn't. I assume that somewhere along the line, wealthy people in Michigan got enough power to prevent that from happening. It's past time for that power to be challenged. The state of Michigan needs the money, and our working class needs a break.