Third, state consumption tax payments no longer may be deducted against one's federal income tax liability. Some analysts argue that this change has raised the total burden of the consumption taxes compared to other state levies. While not disputing this point, some analysts downplay federal deductibility's importance. They point out that deductibility is irrelevant for the majority of taxpayers, since most do not itemize on their federal return. In a typical year, only one-third of Michigan taxpayers itemize at the federal level, and those who do tend to be at the higher end of the income scale.
Some analysts point out that consumption taxes have certain advantages.
Some portion of the sales tax burden may be exported to non-Michigan residents who travel into this state. Some point out that the public finds consumption taxes more palatable than other levies because some purchases are made at the consumer's discretion. Families may delay or accelerate purchase of many big-ticket items that are subject to the sales tax, depending on their current circumstances. In contrast, the state income tax is paid when income is accrued, thus there is no way, short of not working, to delay the tax liability. In recent years, some policymakers have proposed replacing the federal income tax with a national sales tax.