(Way to go legislaturemi! Thanks for the good info. Keep it coming! - promoted by matt)
With all the commotion this week about the SBT repeal, another piece of legislation highlighting Republican fiscal recklessness snuck by relatively unnoticed. House Bills 4486 - 4491 passed the House this week, primarily along party lines. This package of bills would abolish the Michigan estate tax (HB 4486) and remove all references to it in current law (HBs 4487-4491).
The estate tax, successfully framed by Republicans as the "death tax," is imposed on the transfer of wealth from the estate of a deceased individual. In 2004, it only applied to estates worth more than $1.5 million. For an excellent introduction to the estate tax, read Wealth and Our Commonwealth, by William H. Gates (yes, the father of Bill Gates).
The problem with the legislation that passed the House is that it does NOTHING to lower tax rates for the citizens of Michigan. From the House Fiscal Agency (argument aganist):
"From a taxpayer's standpoint, the bill is not necessary. The Michigan estate tax is known as a "pick-up" tax, because it allows the state to "pick-up" revenue (the amount of the credit) that would otherwise go to the federal government. This allowed the state to impose an estate tax without increasing an estate's overall (federal and state) tax liability. If the state did not impose the tax, the same amount would be paid in total, but entirely to the federal government. Irrespective of whether the Michigan estate tax is repealed,
taxpayers will not see any reduction in tax liability."
And what will this cost the state? The non-partisan House Fiscal Agency estimates that it will cost Michigan $250 million per year. Keep in mind, that doesn't mean the $250 million stays in the pockets of those who receive an exceptionally large inheritance, it means that the State of Michigan graciously packages it up and sends it to Washington, D.C.
And all this was introduced and passed by the party of fiscal responsibility, the party of states rights.
Once again, ideology trumps reason. |
