[One Thousand]

I just read Dick Morris' latest article. He says that since the tax increases, MI is the only state in the nation whose GDP dropped. Your's is down 1/2%. The nation's is up 3.5% in the same period.

You guys went from being 25th in the nation for GDP to 34th.

Is there any explanations for it besides the tax increases?

Also, anyone know what the actual revenue difference has been?

[djmilf]

Michigan's GDP has been lagging behind the other states' GDPs for the past 10 years. The tax increase happened in late 2007.

For the past ten years Indiana and Ohio have also been lagging behind the other states in terms of GDP. Were there tax increases in those states as well?

One thing that these states have in common is the declining domestic automobile industry.

[magellan]

Originally Posted by One Thousand

I just read Dick Morris' latest article. He says that since the tax increases, MI is the only state in the nation whose GDP dropped. Your's is down 1/2%. The nation's is up 3.5% in the same period.

You guys went from being 25th in the nation for GDP to 34th.

Is there any explanations for it besides the tax increases?

Also, anyone know what the actual revenue difference has been?

Declines with the Detroit 3 automakers. They've shed over 80,000 jobs over the last 7 - 8 years or so. And since a lot of autos are assembled in Michigan, for every automotive job in Michigan, there are quite a few support jobs (suppliers, vendors, etc.) that are lost as well.

The Detroit 3 aren't cutting because of Michigan taxes (as can be evidenced by slashing plants throughout the country), it's more because of a product mix that isn't meshing well with higher gas prices, high legacy costs to employees, and rising commodity costs in the U.S.

Nice try Dick Morris, but 1+1 does not equal 3.

[One Thousand]

You folks seem to have had a knee-jerk reaction. You claim so much without a single source of support.

Originally Posted by djmilf

Michigan's GDP has been lagging behind the other states' GDPs for the past 10 years. The tax increase happened in late 2007.

For the past ten years Indiana and Ohio have also been lagging behind the other states in terms of GDP. Were there tax increases in those states as well?

One thing that these states have in common is the declining domestic automobile industry.

He said that MI was the only one to actually have negative GDP growth. If the others are lagging (say 1.5% when the average is 3.5%) and MI is -.5%, you have to ask why.

Also, are there any numbers that show the rate of decline? (To support or disprove Morris' claim?)

Originally Posted by magellan

Declines with the Detroit 3 automakers. They've shed over 80,000 jobs over the last 7 - 8 years or so. And since a lot of autos are assembled in Michigan, for every automotive job in Michigan, there are quite a few support jobs (suppliers, vendors, etc.) that are lost as well.

The Detroit 3 aren't cutting because of Michigan taxes (as can be evidenced by slashing plants throughout the country), it's more because of a product mix that isn't meshing well with higher gas prices, high legacy costs to employees, and rising commodity costs in the U.S.

Nice try Dick Morris, but 1+1 does not equal 3.

I'm not saying Morris is right. I really don't know.

I do know that all those laborers in the market reward business start ups. So, my question would be "why aren't businesses being started?"

Second, 80K over 8 years isn't much.

Third, are there any GDP numbers which extract the Big 3 to support your position that it's their fault?

Last, for both of you, do you know how the current revenue compares to pre-tax-increase revenue?


FYI: I moved my business from MI because the Treasury changed my tax status. All they did was change me from an annual reporter to a quarterly reporter and that was it. (It was actually the straw.) That's how minor a change can screw up the economy. So, don't be surprised if the tax increase intensified the exodus.

[djmilf]

Originally Posted by One Thousand

You folks seem to have had a knee-jerk reaction. You claim so much without a single source of support.

Lessee, you come onto the forum, post something from Dick Morris (w/o attribution) who makes an allegation that Michigan's shrinking GDP is directly caused by a 2007 income tax increase, then when we doubt this claim, you call it a knee-jerk reaction?

Seriously, you claim to have been from Michigan at some point in your life (or at least, your business had been in Michigan), yet you want a source proving that Michigan is the state that's most closely tied in with the domestic automotive industry? Or that the decline of that industry has had a negative effect on the economy?

Would this report from Comerica Bank (http://www.comerica.com/Comerica_Content/Corporate_Communications/Docs/MichiganEconomicBrief_2008_03.pdf (broken link)) suffice to illustrate that Michigan per capita GDP has serious lagged behind since 2000?

How about this fancy looking news release from the U.S. Department of Commerce's Burea of Economic Analysis (BEA News Release (GDP by State))? Hey, New Hampshire also had a shrinking GDP for 2007! They must have had a tax increase too! Wait, New Hampshire doesn't have an income tax! Maybe, just maybe, negative GDP growth could be caused by something other than tax increases?

Dick Morris, Dick Morris....oh yeah, the secret presidential advistor to the Clintons who later became their public campaign manager, the guy who was caught letting his prostitute listen in on conversations with the President and was subsequently fired? Who afterwards became a "conservative commentator" and a Fox News Network "special guest"? That Dick Morris?

Is this the blog entry that you're talking about: OBAMA’S TAXES COULD WRECK ECONOMY at DickMorris.com ? Where he ties a November 2007 Michigan income tax increase to the negative Michigan GDP growth in 2007? Funny, doesn't explain the bad economic performance for 2000 thru 2006.

Originally Posted by One Thousand

I'm not saying Morris is right. I really don't know.

But still you're going to take Dick Morris at his word?

Look at what happened just last year in Michigan. Democratic governor Jennifer Granholm raised taxes on almost everything in 2007. Income taxes shot up 11.5% and the state’s 6 percent sales tax was expanded to dozens of new services like investment advice, janitorial services, landscaping, ski lifts,=2 0carpet cleaning, and tanning. The $1.75 billion tax package shook the economy to its foundations. Michigan became the only one of the fifty states with a shrinking gross domestic product (GDP). The value of all goods and services produced in the state fell by one half of one percent while the national GDP rose by 3.4%. The state fell from 23rd in GDP to 35th. Taxes caused a disaster.

Apparently, Mr. Morris isn't aware that the services sales tax expansion was never enacted. It was rolled back by the goverment, comprised of Democratic Governor Jennifer Granholm, a State House controlled by the Michigan Democratic Party, and a State Senate controlled by the Michigan Republican Party. Nice of Mr. Morris to pin this on the Democrats when the Republicans also had a hand in it.

I also liked the "income taxes shot up 11.5%". It went from 3.99% to 4.35% for 2008, and it was enacted as of October 2007. This means that it was pro-rated for Tax Year 2007 and the effective tax rate for 2007 was 4.01%. Michigan state taxes

So if I'm understanding Mr. Morris, Michigan's shrinking GDP was causes by a 0.02% increase in the income tax.

Oh, and the tax increase proposed by Barack Obama? Take another look at it and let me know if it's similar to the one passed in 1993 by Democratic President Bill Clinton and the Republican Congress. You know, the one that ushered in the prosperity of the 1990's? Only difference is that in the 1990's the Federal deficit was kept under control, something that hasn't happened since 2000.

[One Thousand]

Originally Posted by djmilf

Lessee, you come onto the forum, post something from Dick Morris (w/o attribution) who makes an allegation that Michigan's shrinking GDP is directly caused by a 2007 income tax increase, then when we doubt this claim, you call it a knee-jerk reaction?

WTF do you mean "without attribution?" I came onto this forum citing the article and asking if it's accurate and if any tax benefit had been realized. You're a psycho who thinks asking questions is an attack.

Seriously, you claim to have been from Michigan at some point in your life (or at least, your business had been in Michigan), yet you want a source proving that Michigan is the state that's most closely tied in with the domestic automotive industry? Or that the decline of that industry has had a negative effect on the economy?

Uh... no. I asked if anyone had any idea why new business wouldn't be starting up or moving there and taking advantage of the flush of unemployed labor.

You're nuts.

How about this fancy looking news release from the U.S. Department of Commerce's Burea of Economic Analysis (BEA News Release (GDP by State))?

No. That cites "real" GDP which is a different measure than Morris used.

Dick Morris, Dick Morris....oh yeah, the secret presidential advistor to the Clintons who later became their public campaign manager, the guy who was caught letting his prostitute listen in on conversations with the President and was subsequently fired? Who afterwards became a "conservative commentator" and a Fox News Network "special guest"? That Dick Morris?

Yes, that's the guy. Should we discount his value because he likes hookers? Does his sexual preferences reflect his powers of perception?

Is this the blog entry that you're talking about: OBAMA’S TAXES COULD WRECK ECONOMY at DickMorris.com ? Where he ties a November 2007 Michigan income tax increase to the negative Michigan GDP growth in 2007? Funny, doesn't explain the bad economic performance for 2000 thru 2006.

That's the one, but I didn't want to bring the national race into it. I was just curious about the perspectives on MI's economy.

I think he was implying that MI would be reversing if you guys weren't burying it further.

But still you're going to take Dick Morris at his word?

No, that's why I was seeking reasonable opinions... but got yours.

I also liked the "income taxes shot up 11.5%". It went from 3.99% to 4.35% for 2008, and it was enacted as of October 2007.

.36% is almost 12% of 3.99%. What are you talking about?

So if I'm understanding Mr. Morris, Michigan's shrinking GDP was causes by a 0.02% increase in the income tax.

A 12% increase in income tax? I think that'd chase a lot of opportunities away. It indicates a wacky government, IMO.

Only difference is that in the 1990's the Federal deficit was kept under control, something that hasn't happened since 2000.

Actually, the other difference was internet technology increasingly productivity at an incredible rate. (According to Greenspan's "The Age of Turbulence".) But, again, I don't care about BO's tax plan. I'm wondering about MI.

[Bydand]

Originally Posted by One Thousand

You folks seem to have had a knee-jerk reaction. You claim so much without a single source of support.

Coming from someone who supposedly pulled his company out of the State because they went from annual reporting to quarterly, calling a few questions a knee jerk reaction is very comical. Calling somebody a psycho because they question the validity of a report, that quite frankly is very shaky, is uncalled for.

The increase in personal income tax for year 2007 was from 3.99% to 4.01% over the course of the year. We will see the full increase showing up this year due to it being in place all year and not just the last couple of months. Any report that states the negative growth in the GDP is due to that small of an increase (and that is what it is trying to say because the figures for 2008 are not in yet so they have to go by 2007) that late in the year is grasping at straws that cannot be proven.

[One Thousand]

Originally Posted by Bydand

Coming from someone who supposedly pulled his company out of the State because they went from annual reporting to quarterly, calling a few questions a knee jerk reaction is very comical.

That's stupid. Reread the post: "It was the straw"... as in the last straw or straw that broke the camel's back. I was quickly getting fed up with the state (mainly Detroit) and then the change came... I figured if things had gone down as far as they had, it was an indication of the future. Oh look, taxes were raised in a recession! Knee jerk? If it saved me from enduring the last few years in MI, I guess it was a good reflex, eh?

Calling somebody a psycho because they question the validity of a report, that quite frankly is very shaky, is uncalled for.

Duh duh duh duh... Please cite the exact exchange.

Any report that states the negative growth in the GDP is due to that small of an increase...that late in the year is grasping at straws that cannot be proven.

It's not the increase that would be the issue, IMO. The issue would be undermined confidence. I'd like to see what happened in GDP and population shift from 9/07 to now... I'd also like to see what he's basing his claims on.

[Bydand]

Originally Posted by One Thousand

If it saved me from enduring the last few years in MI, I guess it was a good reflex, eh?

Not really IMHO.

Originally Posted by One Thousand

Duh duh duh duh... Please cite the exact exchange.

Easy

Originally Posted by One Thousand

You're a psycho who thinks asking questions is an attack.

Originally Posted by One Thousand

It's not the increase that would be the issue, IMO.

If it isn't the issue, than why did you harp on that exact issue when it was raised by the person you called a psycho and then insist it was 12% and not the .02% raise he stated.

[magellan]

Originally Posted by One Thousand

You folks seem to have had a knee-jerk reaction. You claim so much without a single source of support.



He said that MI was the only one to actually have negative GDP growth. If the others are lagging (say 1.5% when the average is 3.5%) and MI is -.5%, you have to ask why.

Also, are there any numbers that show the rate of decline? (To support or disprove Morris' claim?)



I'm not saying Morris is right. I really don't know.

I do know that all those laborers in the market reward business start ups. So, my question would be "why aren't businesses being started?"

Second, 80K over 8 years isn't much.

Third, are there any GDP numbers which extract the Big 3 to support your position that it's their fault?

Last, for both of you, do you know how the current revenue compares to pre-tax-increase revenue?


FYI: I moved my business from MI because the Treasury changed my tax status. All they did was change me from an annual reporter to a quarterly reporter and that was it. (It was actually the straw.) That's how minor a change can screw up the economy. So, don't be surprised if the tax increase intensified the exodus.

That's 80,000 just in the Detroit 3. In case you haven't heard, the total number of manufacturing jobs lost in Michigan since 2000 is over 200,000. Most of those were companies supplying the automotive industry, and happened well before the income tax increase. Eventually that started to affect GSP (how could it not?)

The income tax increase had no effect on how employers like the Detroit 3 and their bevy of suppliers handled layoffs. They just passed that income tax along to employees.

There are other non-business-friendly policies in Michigan that need to be changed, but Morris is still wrong (and apparently misinformed about the service tax). He's a turd.