MICHIGAN: Soapy’s Solution

Michigan Republicans last week felt real power in political muscles that had lain flabby during the eleven years in which Governor G. Mennen Williams has been serving his six terms. Thanks to the state’s prolonged case of insolvency (TIME, May 13), Democrat Williams’ political hopes for presidential attention were stalled—and even the Democrats knew it.

Governor Williams’ proffered solution to the money worries was a graduated state income tax, and that sent shudders of horror down Republican spines, and for that matter, down the spines of many of Michigan’s industrial workers who are no strangers to income tax forms. As the tax squabble dragged on for months, even some Democrats and union people began to doubt the worth of Williams’ plan. Even when the Governor had a chance to let the voters decide between an income tax and a 1% “use” tax, to be piled atop the existing 3% sales tax, he balked —possibly because polls showed people favoring the use tax.

Things could only get worse; state invoices and employees were going unpaid. Last week Williams gave up, reluctantly signed into law a new tax bill: a tiny increase in the state’s business activities tax and the 1% so-called use tax.

Though some legislators pretended that the new law would mean the end of Michigan’s troubles, most thought otherwise. Lawyers are bound to argue that the use tax is really nothing more than an increase in the sales tax, which the Michigan constitution places at a maximum of 3%. The “solution” could amount to no final fiscal solution for Michigan—but very probably it had solved once and for all the G.O.P.’s problem of Soapy Williams.