Floating Tax Rate
May 14, 2007 (letter to Lansing State Journal)



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There's a solution to Michigan's budget crisis, and it's permanent. Never again would our leaders have to scramble to keep the state afloat financially.

Each quarter, the Department of Treasury would estimate total revenues and expenditures. If they don't match up, Treasury would adjust the individual income tax rate so that they do. In effect, the rate would "float" to keep the budget in balance.

Legislators would no longer set the income tax rate, but they would control it indirectly by their actions.

A spending increase, for example, would result in a tax increase. So would a cut in another revenue source, such as business taxes. Legislators could no longer avoid the consequences of their actions.

To claim credit for cutting the individual income tax, they would have to either cut spending or increase other taxes.

Steve Harry