Michigan will never become competitive until we change our tax system in our state. As the Democrats began to take root with 67 seats in the State House in January we must began the discussion of removing the Michigan Business Tax (which is the sister tax to the Single Business Tax) to a more direct tax system that will help benefit everyone.
Under the Michigan Business Tax we still have gross receipts tax of .8% (which the people rejected when they over-rode the governor’s veto of the SBT), a personal property tax (which every state around us has eliminated); and also added a third business tax, an alternative business income tax, which ranges from 1.85 percent for companies generating receipts under $20 million and 5 percent for those above $20 million.
Under threat of government shutdown in 2007, Governor Granholm successfully got the state legislature to raise income tax 12%, and spread sales tax to many services at a rate of 6% on both the consumer and business-to-business transactions, which were on top of all the other taxes. This was after she said she would not raise taxes in 2006 on Statewide TV.
I am in favor of pushing Michigan towards a fair tax system. Under this system we would be able to replace the Single Business Tax (SBT), Personal Property Tax (PPT), 6 mill business School Education Tax (SET) tax, and Michigan Income Tax with a single sales tax. Therefore, taxpayers would be able to only pay tax on the final purchase. All business-to-business transactions would be exempt. There are nine states that have no state income tax are able to subtract their sales tax from their federal income tax liability.
Cities such as Detroit, Benton Harbor and Flint would benefit from the Michigan Fair Tax because most inner cities receive revenue sharing. A portion of the Revenue Sharing distribution is statutory and a portion is constitutional. The portion which is constitutional has always been paid, but the entire statutory amount has not. Thus, the municipalities never know how much they will get, which makes it very difficult to budget and make financial decisions for their municipality. The fair tax eliminates this confusion.
The following is a proposal to make the Michigan Fair Tax part of the Michigan State Constitution.
A PROPOSAL TO AMEND THE MICHIGAN CONSTITUTION BY AMENDING SECTIONS 3, 7, 8, 10, and 11 OF ARTICLE IX, AND BY ADDING SECTIONS 43, 44, 45, 46, AND 47 TO ARTICLE IX. THE AMENDMENT IS BRIEFLY SUMMARIZED AS FOLLOWS: The Michigan Fair Tax Proposal would amend the Constitution of the State of Michigan to eliminate the Michigan Income Tax of 4.35% and the Michigan Business Tax and replaces those taxes with a 9.75% sales tax on all consumer purchases of goods and services, but does not tax business to business transactions. No other statewide tax could be restored, enacted, or the sales tax increased without a vote of the people. The state shall reimburse to every Michigan citizen's household an amount based on the Federal Poverty Level Guidelines. This proposal would constitutionally guarantee revenue sharing for counties, townships, cities, and villages.
Other states such as Missouri, Georgia, and Oklahoma have all introduced Fair Tax legislation in their legislatures last year.
On May 3, 2007, State Rep. Fulton Sheen introduced the Michigan Fair Tax Resolution L with 36 co-sponsors, which is over a third of the state legislature. The Michigan Fair Tax Proposal is on its way to becoming a state-wide ballot initiative. It would constitutionally restrain government from imposing any new statewide taxes without a vote of the people. It would make government subject to the same economic up turns and down turns as its businesses and its citizens, and allow people to pay tax only on what they purchased.
By the way here are those sponsors of the House Joint Resolution L.
Fulton Sheen, John Stakoe, Bruce Caswell, Brian Palmer, Tim Moore, Jack Hoogendyk, Darwin Booher, Rick Shaffer, Marty Knollenberg, Arlan Meekhof, James Marleau, Mike Nofs, Richard Ball, Kim Meltzer, David Agema, Pillip LaJoy, John Garfield, Kevin Elsenheimer, Tom Casperson, david Robertson, Judy Emmons, Lorence Wenke, Brain Calley, Rick Jones, John Stahl, Glenn Steil, Kenneth Horn, Pillip Pavlov, Daniel Acciavatti, David Law, Ed Gaffney, David Palsrok, Paul Opsommer, Chuch Moss, Tonya Schuimaker, John Pastor.
Can someone please explain to me why no one in our Detroit Delegation in Lansing did not support this measure? The people above are all Republicans. I find it interesting to see how many people think conservative thought is dead when all of the sponsors of this resolution did this to benefit the rest of our state. Sounds revolutionary to me. After all we are leaving Detroit as if this was Exodus from the Bible because of piss poor services and HIGH TAXES. I cannot recall how many times our inept city government beg for revenue sharing. How about tax reform for once?
Again, the current legislature has failed in addressing the tax problems in Michigan. I mean, even Rep. Andy Dillion from Redford Township survived a RECALL when our economy is in the toilet after he led the effort of raising taxes in Michigan. This is the time for grassroots people and urban conservatives to work hand in hand in making the Michigan Fair Tax a reality.