No-Fault Reforms Shift Taxes, Shaft Taxpayers
Governor Snyder’s auto no-fault “reform” package, introduced this week in the House of Representatives, merely shifts taxes while eliminating lifetime benefits for Michigan drivers and shafting taxpayers.
“Those of us who have been around long enough know that a shift and a shaft of the taxpayers leads to election disaster,” said John Truscott, spokesperson for the Coalition Protecting Auto No-Fault (CPAN). “Remember the lottery? The shift-shaft perception still exists today. I implore legislators to think very carefully before jumping on board with this train wreck.”
The reforms include a $25 Medicaid tax that drivers will pay on their car insurance through 2019. There is also a $30 tax to account for the Michigan Catastrophic Claims Association’s (MCCA) supposed deficit. However, without the ability to analyze the assumptions used by the MCCA to determine its assessment and liabilities, there is no evidence that a deficit tax is necessary.
“Since the MCCA refuses to open its books to the public, or justify what it charges Michigan drivers, the deficit tax included in the Governor’s reform package is essentially taxation without representation,” Truscott said.
The legislation includes a one-time rate reduction of $150 to Michigan drivers. Though the governor calls it a “savings,” this reduction simply accounts for the elimination of lifetime benefit coverage. In addition, a $25 assessment will be added to driver’s insurance to fund the proposed Michigan Catastrophic Claims Corporation (MCCC), which will handle claims between $530,000 and the $1 million cap.
This means under the governor’s proposal, Michigan auto insurance rates will be reduced one time by $150 due to the loss of lifetime benefit coverage, but drivers will pay $80 the first year alone with annual rates yet to be determined – a classic shift-shaft for taxpayers.
The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, hospitals and other health care providers working together to keep Michigan’s model no-fault insurance law intact. Learn more about CPAN by visiting www.ProtectNoFault.org.