I’ll be the first to admit I don’t enjoy (and often put off) filing my income tax returns every year. I dream of a day when we will join the 36 countries which already use return-free filing. Yet despite my procrastination, I am happy to know that I’m doing my part to support our federal, state and city priorities every year.
And I’m not alone. The vast majority of taxpayers (94%) believe it is every American’s civic duty to pay their fair share of taxes. Not only is paying the taxes we owe a sign of personal integrity, it also helps our federal, state and local governments care for us, our families and our neighbors.
In just the past two years, we’ve seen our government help us through a health crisis, using tax dollars to keep hospitals running, pay essential workers and help us pay our bills in the wake of a global pandemic and related economic shock. It’s no surprise, then, that the U.S. has experienced a much faster recovery than our European counterparts.
As in most states, Michigan’s largest expenditure is education, followed by social safety net programs, health and hospitals, transportation, public safety, housing, and parks. All of these goods and services benefit the families, workers and businesses that call Michigan home.
It is only with our fiscal resources that the state can ensure our basic rights and well-being by investing in these public goods and services and the security we rely on. This is why the famous quote, “Taxes are the price we pay for a civilized society,” is inscribed above the headquarters of the Internal Revenue Service. It reminds us of the privilege it is to live in a society where everyone buys in.
Perhaps, in seeing how our state dollars are spent, you find our priorities wanting. Maybe you feel not enough has been set aside for parks or housing. Legislators this year have been quick to propose tax cuts, openly admitting that they will have to cut many services to balance the budget, but voters know many of our essential programs are being underfunded as is. If you aren’t sure where to start, you can look to the Michigan League for Public Policy’s 2023 budget priorities for an idea of where our state could be doing more.
As far as taxes are concerned, the League continues to oppose across-the-board tax cuts that will largely benefit the wealthy while doing little to nothing for taxpayers with low or no incomes.
Instead, we advocate for targeted and equitable tax changes that benefit residents based on need, particularly increasing the Michigan Earned Income Tax Credit (EITC). Increasing the state EITC has support from legislative Republicans and Democrats, Gov. Gretchen Whitmer and a wide array of business and policy organizations.
We hope increasing the state EITC rises to the top of lawmakers’ priority list as tax discussions continue astride budget negotiations. And to help Michigan residents stay informed — and help inform legislators’ conversations — on tax policy, the League has put together a new Tax Policy Basics Hub, where residents can learn about the taxes we pay in Michigan along with the League’s recommendations to increase revenue and improve equity.
It’s up to us to advocate directly with our elected representatives to maintain and grow the pot that funds the programs that are important to us and our future. We need to ensure that any tax changes this fiscal year or in the future are reducing disparities and targeting residents with the greatest needs, not widening the wealth gap and causing cuts to our state programs and services.
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