It isn’t generally well known, but woodchucks are very good
at math and Michigan ’s
new road tax package made this woodchuck whistle.
One of the more interesting requirements of being a working
class person is that you must own and maintain a vehicle mostly for the benefit
of your employer so you can get to and from work. A full-time or part-time
minimum or low wage employee has the same requirement for basic transportation
as someone in the working middle class or the professional class.
Half of all working people earn less than $30,000 per year
and 40% earn less than $20,000 annually. A full-time, minimum wage employee
earns $16,952.
Imagine that you are that minimum wage worker. You drive the
national average of roughly 15,000 miles per year and own a used sedan that
gets 22 MPG. Michigan ’s fuel tax is currently 19¢
per gallon and you pay about $130 annually in Michigan motor fuel tax or roughly 0.75% of
your annual income.
Beginning January 1, 2017, your minimum wage will go up and
you will earn $18,512. The fuel tax will also go up to 26.3¢ so you will pay
about $180 or roughly 0.9% of your annual income.
The annual ad valorum tax on your vehicle is currently about
$95 but it will go up 20% to $114. The combined annual motor fuel and ad
valorum tax will be $244 or 1.3% of your annual income.
The working middle class will not feel the same pinch. “The
teacher, the firefight or the construction worker earning fifty something”[1]
will pay roughly the same tax if they drive an economical vehicle that is at
least three years old. The combined annual motor fuel and ad valorum tax will
be just 0.45% of their incomes.
Six-digit earners will hardly even feel this tax increase
but low income earners will be punished badly. Part-time, minimum wage earners
are hurt the most. They may have to work more than a week just to pay motor
fuel and ad valorum tax; a six-digit earner will pay it with just a few hours
labor.
For those who purchased hybrid or electric vehicles to
reduce their fuel costs, think again. You will be charged an additional $30 to
$100 annually at the time of vehicle registration.
In a cruel stroke of irony the package of bills will not
even begin to fix the fiscal mess called road funding. A complicated package of
reformulated distribution of tax revenues and earmarks from the general fund will
be implemented over a period of six years beginning in 2016 and ending in 2022.
Increased funding during this period is heavily dependent on reductions in
funding for other state programs and assumptions about increased revenue based
on inflation.
Talk about kicking the can down the road, this package takes
seven years to implement and almost all of the money comes in the last two
years with most of it coming from reductions in other spending.
So why does this woodchuck whistle?
Because once again, the Republicans have failed to recognize
and implement the most fiscally sound and responsible solution … increase taxes
on big corporations. Instead they have increased the burden on the working
class, especially on low income earners while setting up future reductions in funding
for state programs that help the same low income working people.
Most of the people who are hurt by this and hundreds of
other bills moved through Michigan ’s
legislature since the Republicans have taken over don’t vote. This woodchuck
thinks that maybe they are not doing the math.
[1] “President
Obama Speaks to the Middle”, Vine Street Report, December 6, 2013, http://vinestreetreport.blogspot.com/2013/12/president-obama-speaks-to-middle.html.
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