I have not heard about this for awhile, but when I saw its consideration, I had an immediate reaction. Michigan is considering placing a 6% on all tickets for sporting events, movies, concerts, and shows — equivalent to the sales tax rate here. While this would raise ticket prices, I cannot see this having much of an impact on the average fan. Even though I may not exactly have lots of money to throw around as a high school student, I see the need for this measure. The deficit is huge, state revenues will probably continue to decline as people in Michigan continue to make less money or lose their jobs — this “luxury tax” can add $100 million annually into the picture. It is a necessary evil. Even where I live, where we have one of the best public school districts in the state, cuts are beginning to surface. Next school year they plan to vote on cuts nearing $2 million, which would increase class sizes among other things, something I cannot imagine. Why must cuts always be the answer? There are already not nearly enough desks, nor the space to put more in plenty of my classes. A small raise in taxes may not be a popular move, but the government cannot give back what it does not take first.
I was angered by a press release on the Tigers’ official website urging fans not to “let them tax our play,” implying that taxes are some kind of villainous evil which serves no purpose besides allowing everyone to suffer. Sports have no business in politics. Let’s say I want to head off to a Tigers game. 6% on the tickets to a trip to Comerica Park is hardly a drop in the bucket to me, and that’s coming from someone who is usually pretty stingy. If I splurge on some infield box tickets for $40 a piece, the taxes on them would only be $2.40, hardly an amount that would make or break my decision to go to a ballgame. On the skyline $5 tickets, the tax would amount to a whopping 30 cents. For the casual fan who does not have the chance to head down to the venue frequently, this tax makes no difference. And even if you do come down to Joe Louis, the Palace, or Comerica Park often, 6% is not the worst thing that could happen. Most of the websites in opposition refer to it as a $100 million tax, rather than 6%. While across the board the small amounts per person would definitely add up, this tax makes the most sense to me. Rather than increasing other taxes, it taxes luxury items that are more frequently partaken by those who can afford it. Let’s face it — there is nowhere else to take cuts from.
The proposed “luxury tax” should be the least of our worries.
8 Comments
June 20, 2007 at 4:42 pm
I really liked your post and I do agree with your reaction to the “don’t let them tax our play” comments. Particularly, as i just noted on my tax blog, it is very unclear to me that this would affect MI sport team revenues to a significant degree because I am not sure that demand would be greatly affected. The point is that without a serious analysis of what the elasticities are (and hence the affect on attendance), categorical opposition to the idea seems at the minimum, counterproductive.
June 30, 2007 at 2:24 pm
You’re missing the point here. Granholm wants to raise more money through taxes because she’s insisting on increasing spending even thought the state income is going down. any good business owner knows that when the revenue drops, you don’t insist on spending more and more. The House just passed a budget that increases state spending by over 9%, and when you deal in millions and billions, that’s a heck of a lot of money. She’s also resisting any reform to state structure that would eliminate wasteful spending, double dipping (when gov. employees retire, start getting their pension, then get re-hired by the state in another capacity–it’s happening all the time), etc. This lady is just spend crazy and is demanding more and more money from us to fund her need to spend. Sorry. that 6% is a lot of money to many families in this state who (unlike Ms. Jennifer) DO have to pinch pennies and find ways to save. I don’t believe the state needs all that money because I’m absolutely sure there’s way too much wasted right now. When they open their books and show us EVERYTHING they’re spending on, where it’s gone, where it’s going, how they’ve improved and streamlined….THEN and only then will I agree to let them have more money. I just don’t believe they’re using what they’re getting wisely, and I refuse to let them have more of my hard-earned cash without that assurance. Granholm loves to lay off teachers and police officers, but how many DEQ bureaucrats has she let go? (She’s actually increased their number…you know, swampland is much more important that our public safety…) It’s like cutting out the grocery money so Mom can spend it all on salons and haircuts and travel. Sorry, I just don’t buy it.
June 30, 2007 at 7:36 pm
From the sorry state of schools, roads, and the rest of the mess leftover from Engler, it’s obvious that increased spending is necessary. You’re forgetting this is a luxury tax — if families desperately need to pinch pennies, perhaps they shouldn’t be buying tickets to events that are expensive enough to the point at which the 6% is a problem for them. 6% is a lot if you are purchasing a car. 6% is not a large amount if you just bought a $20 ticket to a Tigers game which you could have easily taken in for cheaper or on TV.
July 3, 2007 at 1:57 pm
ripismoney – you have missed the point completely. The funds will not go to the roads and only a very small portion will go to schools. The tiny portion that makes it to schools will be designated for art programs. Students don’t need ‘luxury’ items such as paper, pencils, and books as long as they have a good art program!
The vast majority of the ticket tax money will be distributed at the sole discretion of the “culture council” members. That’s right; the culture council will decide what us poor, pathetic, uneducated, and uncultured citizens should support.
Should this ticket tax pass we will be so fortunate as to no longer need to leave the support for “cultural” events in the hands of interested parties – only to be funded by private donations and tickets sales. We will no longer have to lay awake at night worrying about such things as we have the hard working Michigan government telling us where our entertainment dollars should go and what cultural events we will sponsor. What a relief!
As you alluded to, in hard economic times people need to make choices as to the best use of their income. Perhaps the Michigan government should adopt your penny pinching approach and NOT spend OUR hard earned money on these luxury items.
Crazy idea here. . . just throwing it out there. How about we let the people decide where and how to spend what little disposal income they have left.
July 14, 2007 at 9:38 am
Mary’s right. This is a proposed tax is on the fans…not the teams or the players. An article in the News last week gave a statistic that after we pay our taxes, our mortgage, our bills, put food on the table and sock a little away for a rainy day…we have 5% left in discretionary spending. And now the government wants another piece of that too.
What kind of tax policy taxes family time at the ball game or the movies?
If we all use the same services, we should all pay for it equally. Why target family time like it’s some kind of sin tax like cigarettes or liquor?
There’s still a lot of fat in the budget. Should teachers be getting life time no co-pay health benefits for 5 years on the job? And do we really need to keep non-violent 70 year old crooks in prison @$30,000 per year?
I thank the Tigers, the Pistons and the rest of the teams for letting us know about the tax proposal. If politics is going to start affecting sports…then the sports folks need to speak up.
September 13, 2007 at 8:18 am
I agree that $2.40 is a drop in the hat for a $40 ticket. I also happen to be a season ticket holder to MSU football. $550 is the average cost of my two seats, not throw another $33 on top of that.
The point is also, that the government is taxing money that has already been taxed. What I take home in my paycheck is left over from the taxes the Feds and state of Michigan have already taken from in the form of taxes. Why do I need to get taxed for more after they have already had their share of my check.
Its sort of like buying a new car. The government gets 6% of the price of a car that a Michigan resident purchases. This is after he has already been taxed on the money he is using to buy it. Then when he goes to sell that car five years later, the next person pays 6% on that same car, that the state taxed when it was new. The average life of car in the state will be taxed four times in its life.
Michigan is already one of the highest “taxing the citizens” states in the union. It needs to stop!
September 14, 2007 at 9:30 am
Granholm needs to get a house cleaning job.
September 14, 2007 at 9:35 am
Granholm is so WACK that this idea of the “luxary tax” is just to make us pay more money.