Michigan Governor Committed to Massive Gas Tax Hike

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Posted by Derek Peterson on Monday, June 10th, 2019, 3:27 PM PERMALINK

Michigan Governor Gretchen Whitmer (D) still wants to impose a whopping 45-cent per gallon gas and diesel tax increase. Recently, on Mackinac Island, Gov. Whitmer took to urging businesses to support her efforts. Fortunately for the hardworking taxpayers across the Great Lakes State, the Republican-controlled legislature is not likely to let this happen.

Michigan taxpayers already face a heavy tax burden at the pump, as is illustrated below.

  Gas  Diesel
State Gas Tax 26.30 26.30
"Other" Taxes and Fees 16.56 17.90
Federal Gas Tax 18.40 24.40
Total 61.26 68.60


To put this rate in perspective, the table below shows the current national average gas tax rates across the country.

  Gas Diesel
State Gas Tax 23.12 23.81
"Other Taxes and Fees 11.12 12.08
Federal Gas Tax 18.40 24.40
Total 52.64 60.29

 

Yet, Governor Whitmer wants Michigan taxpayers to cough up even more. Her proposed 45-cent per gallon fuel tax increase, which would nearly triple the current amount and give Michigan the unwelcome distinction as home to the highest gas tax in the nation, adds up to a $2.5 billion tax hike. Adding insult to injury, only $1.9 billion of this massive tax hike would actually be used to repair roads.

The Mackinac Center for Public Policy, a Midland-based think tank that advances the principles of free markets and limited government, ran a 45 cent gas tax proposal through the State Tax Analysis Modeling Program (STAMP), a Michigan-specific software package.

“The tax increases, it [STAMP] says, would cost more than 22,500 private sector jobs and raise just under $2.5 billion annually by fiscal 2022. It would also increase government employment by 6,300 jobs,” explained Michael LaFaive, Senior Director of the Morey Fiscal Policy Initiative at the Mackinac Center, of the impact that adding 15 cents to the current gas tax in October and then another 30 cents the following October would have on the economy.

Republicans in the House recently rolled out their own road-funding plan that, instead of imposing a massive net tax increase, would dedicate the 6 percent sales tax on gasoline to fund road construction.

Rather than asking the hardworking taxpayers across Michigan to hand over even more of their income at the pump, lawmakers should use existing revenue more efficiently.

Photo Credit: Robert Geiger

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