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veryone has been won-
dering who wins and los-
es under a host of new
federal, state and local
taxes? Jewish financial
experts say it depends on
the individual or business,
but most agree people will be
paying more in taxes, especial-
ly anyone with an income of six
figures or more.
The federal deficit-reduction
package passed last August will
start to bite in 1994; voters in
Michigan have a choice between
two tax proposals in a special
election on March 15. Regard-
less of the outcome, some state
taxes will begin to take effect as
soon as May (see box).
Under a ballot plan favored
by Gov. John Engler, the state
sales tax would be increased
from 4 to 6 percent in return for
a property tax reduction to 6
mils. In addition, there would
be a new 2 percent property
transfer tax, a 50-cent increase
in cigarette taxes, a 0.2 percent
reduction in income taxes and
a tax jump from 4 to 6 percent
on out-of- state phone calls.
If the ballot plan fails to win
a majority, a statutory fallback
plan takes effect. The latter pro-
posal would keep the sales tax
at 4 percent, decrease property
taxes to 12 mils, offer a 1 per-
cent property transfer tax, a 15-
cent jump in cigarette taxes and
provide an additional $900 for
exemptions on personal income
tax statements. The tax on out-
of-state phone calls would stay
at 4 percent while the income
tax would jump 1.4 percent.
"My advice to citizens of the
state is to sit down and look
over the two proposals and fig-
ure out which one best suits
your needs. The ballot propos-
al will likely be better for home-
owners because of reduced
property taxes," said Stephen
Epstein, a partner and retail tax.
expert with Coopers & Ly-
brand, a Big Six accounting
firm with offices in Detroit.
"The statutory fallback may
be better for businesses, as it
School finance plan,
federal tax
increases
may hit
hard
if you make
over six figures.
R.J. KING
SPECIAL TO THE JEWISH NEWS
keeps the sales tax where it is
at 4 percent. But really, it de-
pends on individual situations.
Most retail owners you talk to
do not want the sales tax in-
crease because they feel it will
slow consumer purchases. But
most shoppers won't give it a
second thought, unless it's a big
ticket item."
Mr. Epstein added the 6 per-
cent sales tax under the ballot
plan would also be paid by
tourists, one of Michigan's
largest industries. In general
terms, he forecasted older peo-
ple who own homes would fa-
vor the ballot plan as it offers a
property tax reduction to 6 mils
and a 6 percent sales tax. These
homeowners would shrug off
the sales tax hike as most are
established and have every-
thing they need.
Younger people, meanwhile,
especially those who are rent-
ing homes or apartments,
would likely favor the statuto-
ry plan as it maintains a hands-
off approach to the sales tax. In
turn, the plan offers a $900 in-
crease in the personal income
tax exemption, making the one-
time write off a $3,000 bonan-
za.
"An increase in the sales tax
would burden younger people
more, but really, when you look