Insurers Say Granholm’s Premium Tax Hike Will Hurt Mich. Consumers

The Washington, D.C.-based American Insurance Association recently voiced strong opposition to Michigan Gov. Jennifer Granholm’s proposal to shift hundreds of millions of dollars in taxes onto the insurance industry, arguing it would chill industry job growth and hurt consumers.

“The governor’s tax proposal is just a shell game with few winners and many losers,” said Sean McManamy, assistant vice president AIA’s Midwest region. “Consumers and small businesses will lose as the plan shifts the tax burden onto a select few industries—many of which already pay a disproportionate share of the state’s taxes—and dramatically increases costs for all insurance consumers.”

Granholm, a Democrat, unveiled two bills last week as part of her Single Business Tax reform package. Insurers, which already account for 11 percent of the state’s business taxes and carry one of the heaviest burdens as an industry in the state, will see their share rise to an estimated 23 percent.

“While other states in the Midwest have rolled back premium taxes to promote growth in this vital market segment, this administration has done the opposite,” McManamy said in a statement.

Insurers directly employ more than 39,000 people in Michigan, and paid more than $241 million in state taxes last fiscal year, more than most businesses according to the Michigan Department of Treasury.

Topics Carriers Pricing Trends Michigan