In Fiscal Year (FY) 2013, Michigan collected $37.2 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average Michigan taxpayer can afford this level of taxation.
As shown in Chart 1 below, Michigan’s state and local tax burden (tax collections divided by personal income) was the nineteenth lowest in the nation for FY 2013 at 9.7 percent—this is -6 percent below the national average of 10.3 percent. As shown in Chart 2, Michigan’s tax burden has grown over time by 30 percent to 9.7 percent in FY 2013 from 7.5 percent in FY 1950.
Michigan’s lower than average state and local tax burden is driven by their low individual income tax burden (2 percent, 33rd highest), corporate income tax burden (0.23 percent, 37th highest), and low all other taxes burden (1.8 percent, 31st lowest).
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Michigan—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.
The Michigan counties with the highest local government tax burden include: Charlevoix County, MI (6.8 percent), Ontonagon County, MI (5.9 percent), and Roscommon County, MI (5.8 percent). The Michigan counties with the lowest local government tax burden include: Barry County, MI (2 percent), Livingston County, MI (2 percent), and Clinton County, MI (2.1 percent).
J. Scott Moody has over 18 years as a public policy economist with a specialty in tax policy and has over 180 publications. He has worked for numerous national and state-based think tanks such as Federalism In Action, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.