Since his election last November, Michigan Governor Rick Snyder has consistently proven himself to be little more than a shill for his conservative corporate pals. But his latest proposal really boggles the mind. Michigan has among the worst roads in the entire nation and we have no money to fix them (or any of the other things that need repair).
One of the big reasons our roads are roads are so decrepit is that Michigan remains one of the only states in the country that still allows 80 ton trucks which just tear up the pavement. Most states limit trucks to just 40 tons. Instead of addressing this problem, Snyder has proposed changing the way roads are funded.
He wants to eliminate the retail fuel tax of $0.19 per gallon on gas and $0.15 on diesel and raise the cost of vehicle registration by an average of $120 per year. That would more than double the amount I pay for registration on the vehicles in my household.
He also wants to implement a wholesale fuel tax which he claims "is a more viable long-term funding approach." How is a fuel tax levied at the wholesale level any more viable than a retail tax? A wholesale tax is still passed along to drivers when they fill their tanks. The only difference is that the amount they pay will be further obfuscated when the tax is shifted upstream.
A further downside of this shift in the tax burden is that it disincentivizes efficiency and punishes those that drive less. A car owner that drives 1 mile or 100,000 miles will pay the same. If the wholesale tax works out to be less per gallon than the current retail tax (fat chance of that) driving further or driving a thirstier vehicle will actually cost less.
Simply raising the current retail tax instead would encourage less petroleum use and put less load on the roadways, which would ultimately cost us less to maintain and build. But a straight-up increase in an existing tax to fund absolutely necessary infrastructure is absolutely anathema to a Republican hack like Snyder. Instead he will shuffle the deck chairs in a way that will probably cost the 99% more in the end while making it seem like the opposite.
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Snyder floats increasing vehicle registration fees as idea to raise $1B for Michigan roads
Gov. Rick Snyder said today he thinks the state should try to find a way to raise an additional $1.4 billion in revenue for roads …
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Raising the cost of vehicle registration is just brilliant. Companies will register in other states and never have to pay it, and common tax payers will eat the bill. Same with fuel taxes. Regular drivers get screwed and companies purchase elsewhere at lower prices.
Well, it's not quite that simple. A business (like an individual) would have to drive to another state to fill up to avoid the Michigan fuel tax. Fuel delivered to Michigan from another state would be subject to it.
Companies registering their fleets in other states? I don't know if that will happen. Especially if the new Corporate Income Tax allows a credit for purchases, similar to the ITC or the CAD. Those must be in Michigan to qualify.
Not that business isn't pulling the strings in current state politics….