Michigan has the Twenty-Second Lowest State and Local Tax Burden in the Nation for FY 2016

Apr 03, 2018

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In Fiscal Year (FY) 2016, Michigan collected $40.3 billion in state and local taxes—or $4,056 for every man, woman, and child. 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?


To better answer this question, this analysis will calculate Michigan’s tax burden relative to the private sector. Ultimately, it is the private sector that creates new wealth and income. A high tax burden means a state is hobbling its private sector relative to other states and reducing their long-run economic growth potential.



Click here to view tax burden data by state, type of tax, and for years 1950 to 2016


Fortunately for taxpayers, as shown in Chart 1, Michigan’s state and local tax burden (tax collections divided by private sector personal income) was the twenty-second lowest in the nation for FY 2016 at 13.5 percent—or -5 percent below the national average of 14.3 percent.


Chart 1 Michigan State and Local Tax Burden FY 2016.jpg


#Michigan state and local #taxburden in FY 2016 was the 22nd lowest in the nation at 13.5%— -5% below the US average of 14.3% @keypolicydata #MIpolitics #MIpol #MIleg #MIsen #MIgov #PolicyData (click to tweet)


As shown in Chart 2, Michigan’s tax burden has increased over time by 59 percent to 13.5 percent in FY 2016 from 8.5 percent in FY 1950.


Chart 2 Michigan State and Local Tax Burden by Type of Tax FY 1950 to 2016.JPG


#Michigan state and local #taxburden has increased 59% between FY 1950 (8.5%) to 2016 (13.5%) @keypolicydata #MIpolitics #MIpol #MIleg #MIsen #MIgov #PolicyData (click to tweet)


Click here to view tax burden data by state, type of tax, and for years 1950 to 2016



As shown in Chart 3, Michigan’s 13.5 percent tax burden is greater than these combined industries: retail trade (6.1 percent), construction (5.3 percent), and educational services (1.2 percent).


Chart 3 Michigan State and Local Tax Burden vs. Major Industry FY 2016.JPG


#Michigan state and local #taxburden > combined industries: retail, construction, and educational services @keypolicydata #MIpolitics #MIpol #MIleg #MIsen #MIgov #PolicyData (click to tweet)


Michigan’s lower than average state and local tax burden is driven by a low corporate income tax burden (0.3 percent, 14th lowest), low sales tax burden (3.1 percent, 18th lowest), and low all other taxes (1.9 percent, 18th lowest), but that is partially offset by other taxes such as the high property tax burden (4.6 percent, 20th highest)


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 20 Michigan counties with the highest local government tax burden include:


  • Ontonagon County, MI (13.8 percent)
  • Roscommon County, MI (12.9 percent)
  • Baraga County, MI (11.7 percent)
  • Luce County, MI (10.8 percent)
  • Lake County, MI (10.1 percent)
  • Mackinac County, MI (10.1 percent)
  • Mason County, MI (9.4 percent)
  • Charlevoix County, MI (8.8 percent)
  • Ingham County, MI (8.6 percent)
  • Iosco County, MI (8.5 percent)
  • Manistee County, MI (8.4 percent)
  • Chippewa County, MI (8.4 percent)
  • Iron County, MI (8.3 percent)
  • Alger County, MI (8.0 percent)
  • Crawford County, MI (7.8 percent)
  • Cheboygan County, MI (7.7 percent)
  • Antrim County, MI (7.7 percent)
  • Schoolcraft County, MI (7.5 percent)
  • Mecosta County, MI (7.4 percent)
  • Alcona County, MI (7.2 percent)


The 20 Michigan counties with the lowest local government tax burden include:


  • Missaukee County, MI (4.1 percent)
  • Genesee County, MI (4.0 percent)
  • Saginaw County, MI (3.9 percent)
  • Jackson County, MI (3.8 percent)
  • Kalamazoo County, MI (3.7 percent)
  • Monroe County, MI (3.7 percent)
  • Macomb County, MI (3.7 percent)
  • Menominee County, MI (3.5 percent)
  • Eaton County, MI (3.5 percent)
  • Hillsdale County, MI (3.4 percent)
  • Ottawa County, MI (3.4 percent)
  • Allegan County, MI (3.4 percent)
  • Kent County, MI (3.2 percent)
  • Shiawassee County, MI (3.2 percent)
  • Cass County, MI (3.2 percent)
  • Oakland County, MI (2.9 percent)
  • Lapeer County, MI (2.8 percent)
  • Clinton County, MI (2.5 percent)
  • Barry County, MI (2.5 percent)
  • Livingston County, MI (2.3 percent)


Chart 4 Michigan Local Tax Burden by County FY 2016.JPG


Click here to view tax burden data by state, type of tax, and for years 1950 to 2016


Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 66 years! See if your state has been above or below the national average?





Category: Tax Burdens

J. Scott Moody

Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.

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