A SoapBlox Politics Blog
[Mobile Edition]
About
- About Us
- Email Us (news/tips)
- Editorial Policy
- Posting Guidelines
- Advertise Here
Feedburner

Subscribe to Michlib daily email summary. (Preview)
Enter address:

Donate
Become a sponsor and support our work.

 MichLib sponsor list

Michigan Political Blog Ad Network

Advertise Liberally

50 State Ad Network

Regarding the 'widely despised' and 'much-hated' service tax controversy...

by: Hazen Pingree

Thu Nov 29, 2007 at 08:06:16 AM EST


First off, I have an MSM beef. All this morning, our local Lansing-area NPR affiliate has been repeating stories over and over about the stalemate on fixing the "widely despised" and "much-hated" service tax. That's pretty much been the trend across all of Michigan's media, who now seem to be perfectly comfortable using all sorts of unequivocal qualifers like "despised" and "hated" in front of "service tax." (Just like Dick DeVos always used to insert the words "jobs-killing" in front of "Single Business Tax")

Yes, OK, the serivce tax is pretty durned unpopular with business owners. No doubt about that. Especially ones who will have to start collecting it Saturday unless something changes right quick. But to me loaded words like "despised" and "hated" suggest there are legions of angry citizens outside the statehouse carrying buckets of stones, tar and deer rifles and getting ready to break the door with a battering ram.

Let's be clear: they're not. In spite of whatever spin the Detroit Chamber might try to attach to it -  an EPIC-MRA poll from a couple of weeks ago shows 55% of respondents opposed to applying the sales tax to certain services. A majority sure, but really, what taxes do people like? The "widely-popular income tax?" Or the "much-beloved property tax?"

If 55% is all that's required for the MSM to unequivoically start labeling things "despised" or "hated", I suppose we can at least exepct them to start inserting the words "widely despised" before "President Bush" or "Congressman Tim Walberg." Any day now...

Anyway, the MSM's opinioneering aside, the sad thing about this whole service tax stalemate is that on the major issue, there is actually genuine consensus!

(More below the fold...)
Hazen Pingree :: Regarding the 'widely despised' and 'much-hated' service tax controversy...
Nearly everyone agrees it would be better to just replace the service tax with some sort of expansion of the business tax. But instead of just doing that, would-be Governor Mike Bishop and the Senate Republicans have decided to add some new demands. Chief among them that the new solution use up some one-time revenue and...most importantly, that it expire in 2011 or 2012 - putting us right back in budget hell. The current "much-hated" service tax, you may recall, has no expiration date.

To their great credit, the Governor and the House Dems have held firm against this demand. And well they should. They already compromised on this point back when the original budget deal was enacted. If you can remember way back to October 1, the deal that ended the government shutdown involved two main tax increases: the "much-despised" service tax (which was only passed because it's the only thing the Republicans would agree to); and an increase in the income tax. The service tax has no expiration date. Much to my consternation, the income tax increase DOES expire, beginning in 2011. Of course by then the economy will be peachy and we'll almost certainly all have all the money we'll ever need, along with a chicken in every pot and two cars in every garage. So it won't be a problem. Quit worrying. Besides, by then we'll have a new governor and whole new crop of pimply-faced term-limited legislators who can step in and save things at the last instant...that is if they can find their way out of the bathroom.

And of course now Bishop and his corps of Republican visionaries want to make sure the replacement for the service tax expires too....which means eight years from now (when the income tax is back to 3.9%) we'll be right back where we were before this mess started. 

Okay, so what now? Well, probably the serice tax will just take effect on Saturday. C'est la vie. The Repubs had their chance to do something about it and blew it. However...

If Sen. Bishop does suddenly decide he's ready to quit screwing around, here's one idea for a compromise: let's agree to have the business tax expansion (surcharge or whatever they're calling it) expire in 2012. In exchange, the expiration date will be removed from the earlier enacted income tax increase. I don't know for sure, but it seems that increasing the income tax is generally a more politically difficult sell. So, while this would allow Bishop to say he's made the replacement tax temporary, it would also potentially make dealing with the crisis in 2011 or 2012 a tad easier for those of us who give a damn about fiscal responsibility.

This idea just came to me in a flash this morning - and there's probably some things I haven't considered. But what the hell? Figured I'd put it up for discussion. After all, anything would be worse than the widely-despised and much hated service tax which will kill us all and render our landscape a radioactive wasteland in less than 48 hours. Right?
Tags: , (All Tags)
Print Friendly View Send As Email

Regarding the 'widely despised' and 'much-hated' service tax controversy... | 30 comments
Whether or not it's "despised" by the population at large...
...it's still a pretty stupid hodgepodge of a tax.
It's not just me
Thanks Hazen. I was wondering if it was just me who was irritated by the decidedly "unfair and unbalanced" right-wing portrayal in the media. Proof positive once and for all - there is absolutely NO TRUTH to the "liberal media" hoax. If the service tax was really SOOOOO despised, why is it that the pro-business groups didn't jump at Granholm and the House's many proposals to replace it? The real truth is - they don't just hate the service tax, they don't want ANY tax at all. They want to shirk their responsibility for paying their fair share and force individual taxpayers and struggling families to shoulder the entire responsibility of Michigan's economy. Where is the media portrayal of the pro-business "alternative" plans? Has anyone seen one story published on that? At all???

Nothing is easier than solving a problem on the back of the poor. People who don't have lobbyists or clout.
The REAL much-hated thing in MI is idiocy
Bishop & Co. are in love with the Amazing Disappearing Revenue Source, conveniently designed to give short-term (political) pain relief and avoid all those pesky symptoms of fiscal responsibility. If you're a business owner, what incentive do you have to move to (or stay in) Michigan with this mondo bizarro approach to budgeting?
Well said, Guv.

When I'm not hiding from the Primary Shouting Matches, I do spend time wondering what on Earth our legis-critters are doing with the budget.  Common sense solutions like that proposed by the late Gov. Pingree aside, I haven't seen too many brilliant ideas, only political posturing on BOTH sides of the aisle.

And yes, most of the members of the Democratic caucus have advocated for the "less bad" solution.  But is that all that our Legislature is capable of?  Getting by.  Doing the minimum.  Is this what our great State is worth?



Do stupid people know they are stupid?
Alright, Pottsie, you wanna grab the bull by the horns...
Give me a '1' rating on a comment in the rage-filled primary thread, will you? Have at you!

Among the Trees
[ Parent ]
Right back at you.
See if I buy you that beer, Mr. Managing Editor.

Do stupid people know they are stupid?
[ Parent ]
Which beer?
The sixth? Or, the seventh? En garde!

Among the Trees
[ Parent ]
I'm pretty sure...
that you WERE going to get a pony (keg).  But now?  Nothing.  Or mabye a Pabst.  A warm, flat Pabst.

Do stupid people know they are stupid?
[ Parent ]
Don't test how cheap I come...
A '1' to you!

Among the Trees
[ Parent ]
A pabst....
Geez, J, just give him a 0. It's much more polite!
[ Parent ]
High entertainment...
Besides, by then we'll have a new governor and whole new crop of pimply-faced term-limited legislators who can step in and save things at the last instant...that is if they can find their way out of the bathroom.
...and...
After all, anything would be worse than the widely-despised and much hated service tax which will kill us all and render our landscape a radioactive wasteland in less than 48 hours.
As I understand things, this makes the service tax actually worse than the Single Business Tax. While the SBT would occasionally slink through the shadows and throttle small children as they slept at night, at least it didn't monkey with our ability to grow crops.

Among the Trees
One tax that is popular...
Progressive income tax. We need it. Hell, I've been saying all along that we should have it put to the ballot to replace the service tax. Let the voters decide.
I'll also add...
That one of the gripes you hear about the service tax by the Republicons is that it taxes psychics, astrologers, etc. If you're putting forth your hard earned cash to see a "psychic", you deserve to be taxed. And it shouldn't be called a service tax. It should be called an idiot tax.
Idiot tax alread has a name
it's called the Lotto.
[ Parent ]
I widely despise it, roundly too
The service tax is an absolutely horrible tax. It is applied without logic or fairness, disproportionately taxing certain sectors while skipping over others. Check out some of the things that will be taxed: * Site selection consulting * Business management consulting * Business start-up consulting * New product development consulting services * Marketing consulting services Do any of those sound like services that a state trying to re-invent itself might need?? Add to it the fact that it is creating uncertainty in an already risky state to do business in and you can see why pretty much anyone who has taken the time to try and unravel this Gordian Knot of incompetence is opposed to it. In my opinion, it is absolutely indefensible and one of the worst pieces of legislation I have ever seen. More on the service tax at Absolute Michigan.

Absolute Michigan, All Michigan, All the Time
Egads!
Wow, a whole two cents! My hearts absolutely bleeds for you! Lemme see - I get my hair done at a cost of $40 bucks. So with the new service tax that will be: 2% x $40 = (ummm, divided by 37, take away nine, carry the 1, ##, enter key) A whole 80 cents!!!!!! WOW!!!! UNFAIR!!!! My hairdresser can't afford that!!!!

Nothing is easier than solving a problem on the back of the poor. People who don't have lobbyists or clout.
[ Parent ]
re: Egads
Um. Yvette, 2 cents (or 2%) is basically a buzzword.

6% is the service tax rate, so your hairdresser pays $3.20. Not a lot, but 8 haircuts a day is $25 x 5 days is $125 per week x 4 is $500 per month x 12 is $6000.00 a year. That's more than a cup of coffee, that's a community college bill for your kid.

Your average Site Selection bill (that's when a company pays a firm to find a new location for them) is in the $100,000+ range. Add six grand (or 6%) and you make a Tennessee firm a lot more attractive to find your next location.

What do you bet that those firms from Tennessee and other states push more local sites at their clients?

Absolute Michigan, All Michigan, All the Time
[ Parent ]
Outrage
I understand your outrage. I think the services are a motley collection. But if I'm stuck paying sales taxes everytime I go to the grocery store for things I actually need to live (like milk, cereal, meat, vegetables), or at the gas station for gas (something I need to purchase frequently in a state with no credible pubic transit to speak of), then businesses can pony up for services they buy. In the case of hair care, the hairdresser will just tack that 6% on top of your bill. So what. You think they'll automatically jump to a Tennessee site selection firm? If they can afford $100,000 to spend on site selection, $6000 isn't going to hurt them. By your logic, since we're shipping jobs to China, we should just lower the wages of workers in Michigan to $4/hour to make them more competitive. At a certain point, people here are going to have to figure out what amount they can live with paying for what services they want the government to provide. Look no further than Eric B.'s post today about cuts to pre-school programs and mortgage fraud investigators to see what people are having to do without. I think too many people are having to without plenty in this state already.
[ Parent ]
re: Outrage & Knowledge
The point is not that businesses should be immune from taxation.

The point is that businesses should be immune from STUPID AND UNFAIR TAXATION.

I get that you will happily pay more for hairdressing. For myself, I will get less haircuts. But the point isn't haircuts. It's competitiveness. We don't live in a world where we as business owners compete only against people in our state. We compete against Chicago and New York. For a marketing agency in Grand Rapids with eyes on the national market, this tax is a deadly blow because they must either pay less (meaning they lose talent) do less work for the same money (meaning they do a bad job) or charge more (meaning they lose jobs).

Absolute Michigan, All Michigan, All the Time
[ Parent ]
Um, I know
That $6,000 you are talking about is what hairdressers will CHARGE, not what they have to PAY. If its between paying $3 to my hairdresser versus my tuition going up $180 per semester - which it has - I'll take the 3 bucks. I tip my hairdresser twice this amount anyway. Its not going to hurt me.

Nothing is easier than solving a problem on the back of the poor. People who don't have lobbyists or clout.
[ Parent ]
Or you could do what I do:
Cut your own hair. Those of you who have met me at the blogging events know it's worth every penny!

Today impossible...tomorrow possible...changing America one black belt at a time.
[ Parent ]
W H O O P S !
That was me talking there, not my wife! Sorry about the mix-up LadyT!

"I never did give anybody hell. I just told the truth and they thought it was hell." -- Harry S Truman
[ Parent ]
Oh, God no
You do NOT want to see me cut my own hair! Believe me, you would volunteer to pay my hairdresser yourself.

Nothing is easier than solving a problem on the back of the poor. People who don't have lobbyists or clout.
[ Parent ]
Please, tell us what you really think...
I don't anyone like this tax, but there is far more to this than simply dumping on this particular tax. I mean, I remember a time -- seems like about a zillion years ago -- when someone proposed a two-cent service excise across the board. The result, after about nine months of bumbling, was the tax you so desperately hate. And then, here, when they're about to kill the thing for something acceptable, they want to do it in a way that simply -- again -- kicks an economic crisis down the road ... this time far enough that no one in the Legislature today will have to deal with it then.

Among the Trees
[ Parent ]
Bumbling
I agree that the 2% tax was a much better idea and I agree that we need to do something. I also agree that the last nine months have seen one of the largest governmental bumblefests in Michigan's history. Quite frankly, this service tax doesn't appear like it will have a large effect on my business.

That's not the point though.

The point is not even that the tax is a fundamentally terrible and unjust tax that hammers some sectors while leaving others totally untouched.

The point is that the tax doesn't provide what Michigan desperately needs: a stable funding mechanism that encourages growth.

This tax encourages marketing companies, new business consultants, researchers and other industries critical to a growth economy to leave the state or get their butts kicked by businesses from states whose legislators aren't so short-sighted and weak as to create a tax that penalizes businesses without organized lobbies (trial lawyers) or huge and vocal fan bases (sports teams, golf courses).

You can scoff at 6%, but I have been a business consultant for over 10 years and I have seen far too few companies with such profit margins that they can laugh off a 6% hit to the bottom line.

Absolute Michigan, All Michigan, All the Time
[ Parent ]
I don't think anyone's scoffing...
In fact, I don't disagree with you. I don't think that the point of this post was to advocate in favor of it, but to complain about a media theme that has been applied only to this tax, the way the "job killer" label was slapped on the SBT. In fact, I could see where this lazy kind of reporting could enable the service tax being repealed, which I think it unquestionably should be, without a permanent replacement, which I think is an unquestionable part of the equation, too.

Among the Trees
[ Parent ]
Well...
The tax IS widely despised and hated.

The fact that there's thought or talk about repealing it with neither a replacement or cut to balance the budget is a symbol of our representatives' childish natures ... which of course are just representations the natures of those they represent.

I can't subscribe to the argument that we should not roundly despise a roundly despiseable tax because our representatives can't put forth a better to replace it with. It's two different issues.

Absolute Michigan, All Michigan, All the Time
[ Parent ]
(sigh)
Okay, apparently I need to repeat my disclaimer here once again that I am not wild about the service tax either and that it wasn't my first choice and blah blah blah. Yes, I would have much happier with the Guv's service tax plan or just a straight up income tax increase. But, thanks to the Senate Republicans, it was either this or shut down state government. I know 6% is a drag, and the list is very convoluted and unfair. But it's nothing compared to the alternative. At some point we do have to pay our bills. Like I said, let's replace the service tax. Everyone seems to agree an MBT surcharge is a better way to go. Fine, let's do it. But just like the tax that's getting replaced, it needs to be permanent. Is that really so much to ask, especially considering how we already agreed to make the income tax increase temporary. This is only hard because Bishop stupidly insists on trying to muscle in new concessions. I say stupid because he doesn't have the votes in the House or a Guv's signature. So unless you don't really want to fix the problem, why even go down this road? Farlane, you are perfectly free to widely despise the service tax. As I said, there is no doubt many other business owners feel the same way. My point was that I object to the MSM trying to superimpose your opinion (business owners) onto the rest of the population...especially when the available evidence does not bear it out. That's all. If they'd said it was "widely unpopular with business owners", I could live with that. But they're casting a much wider net...and that pisses me off.

"HAZEN S. PINGREE...He was the first to warn the people of the great danger threatened by powerful private corporations, and the first to awake to the great inequalities in taxation and to initiate steps for reforms. THE IDOL OF THE PEOPLE"
Double sigh
If the point you're trying to make is that most people don't care where the money comes from as long as it's not coming from their pockets, I certainly concede that.

It's the same stupid thing we did with our schools with Proposal A: find someone without sufficient power to stop us and stick THEM with the bill.

That hasn't worked very well or given Michiganians a great sense of ownership of our schools and I'm pretty confident that this ridiculous tax wouldn't do any better.

Absolute Michigan, All Michigan, All the Time
[ Parent ]
Agreed
The service tax ought to be replaced. According to MIRS, there is still a possibility the legislature can settle on a replacement over the weekend. Considering the House plan (with no sunset and no using of one-time revenue) has the blessing of the Detroit Chamber, the Grand Rapids Chamber, the Michigan Manufacturing Association and the Michigan bankers - it seems to me like it would be a pretty good place to start. Oddly enough, even with all of that business support, the Michigan Chamber is still calling the House proposal "horrific." My guess is there will be a deal pretty shortly. But they have to find a way for Bishop and the Michigan Chamber to save some face first.

"HAZEN S. PINGREE...He was the first to warn the people of the great danger threatened by powerful private corporations, and the first to awake to the great inequalities in taxation and to initiate steps for reforms. THE IDOL OF THE PEOPLE"
[ Parent ]
Regarding the 'widely despised' and 'much-hated' service tax controversy... | 30 comments

Features

Mobile Blog Reader - powered by Notice Orange
RSS
Politics & Elections Library:
- US Senate
- US House
- Executive Branch
- Michigan Senate
- Michigan House
- State Supreme Court
- Michigan Media

Special Sections:
- Technical Politics - Grebner
- Michigan's Fallen

Search
Progressive Blogroll
For MI Bloggers:
 - MI Bloggers Facebook
- MI Bloggers Myspace
- MI Bloggers PartyBuilder
- MI Bloggers Wiki

Statewide:
 - Blogging for Michigan
- Call of the Senate Dems
- [Con]serving Michigan (Michigan LCV)
- DailyKos (Michigan tag)
- Enviro-Mich List Serve archives
- Democratic Underground, Michigan Forum
- Jack Lessenberry
- JenniferGranholm.com
- LeftyBlogs (Michigan)
- MI Eye on Bishop
- Michigan Coalition for Progress
- Michigan Messenger
- MI Idea (Michigan Equality)
- Planned Parenthood Advocates of Michigan
- Rainbow Mittens
- The Upper Hand (Progress Michigan)

Upper Peninsula:
- Keweenaw Now
- Lift Bridges and Mine Shafts
- Save the Wild UP

Western Michigan:
- Great Lakes Guy
- Great Lakes, Great Times, Great Scott
- Mostly Sunny with a Chance of Gay
- Public Pulse
- West Michigan Politics
- West Michigan Rising
- Windmillin'

Mid-Michigan:
- Among the Trees
- Blue Chips (CMU College Democrats Blog)
- Christine Barry
- Conservative Media
- Far Left Field
- Graham Davis
- Honest Errors
- ICDP:Dispatch (Isabella County Democratic Party Blog)
- Liberal, Loud and Proud
- Livingston County Democratic Party Blog
- MI Blog
- Mid-Michigan DFA
- Pohlitics
- Random Ramblings of a Somewhat Common Man
- Waffles of Compromise
- YAF Watch

Flint/Bay Area/Thumb:
- Bay County Democratic Party
- Blue November
- East Michigan Blue
- Genesee County Young Democrats
- Greed, Eggs, and Ham
- Jim Stamas Watch
- Meddling Outsider
- Saginaw County Democratic Party Blog
- Stone Soup Musings
- Voice of Mordor

Southeast Michigan:
 - A2Politico
- arblogger
- Arbor Update
- Congressman John Conyers (CD14)
- Mayor Craig Covey
- Councilman Ron Suarez
- Democracy for Metro Detroit
- Detroit Skeptic
- Detroit Uncovered (formerly "Fire Jerry Oliver")
- Grosse Pointe Democrats
- I Wish This Blog Was Louder
- Kicking Ass Ann Arbor (UM College Democrats Blog)
- LJ's Blogorific
- Mark Maynard
- Michigan Progress
- Motor City Liberal
- North Oakland Dems
- Oakland Democratic Politics
- Our Michigan
- Peters for Congress (CD09)
- PhiKapBlog
- Polygon, the Dancing Bear
- Rust Belt Blues
- Third City
- Thunder Down Country
- Trusty Getto
- Unhinged

MI Congressional
District Watch Blogs:
 - Mr. Rogers' Neighborhood (CD08)
MI Campaigns:
- ActBlue (MI Congressional Candidates)
- Michigan Round Table for Diversity and Inclusion
- MichUHCAN (Affordable Health Care)
- Politics1 (MI Candidate Listings)
- Senator Carl Levin

MI Democratic Orgs:
- Michigan Democratic Party
- Michigan House Democratic Caucus
- Michigan Senate Democratic Caucus
- MDP Youth Caucus
- Michigan Young Democrats
- Ingham County Democratic Party
- Genesee County Dems Progressive Caucus
- Saginaw Area Democratic Club
- Justice Caucus
- South County Dems (Berrien Co.)
- Western Washtenaw Democrats

MI Progressive Orgs:
- America Votes Michigan coalition
- Michigan Labor organizations
- Michigan Voice coalition

MI Misc.:
- Absolute Michigan
- Center for Michigan
- Citizens Research Council
- Detroit News Politics Blog
- Freep Opinion
- Media Mouse (Grand Rapids Indy Media) Blog
- Michigan Campaign Finance Network
- The Michigan Citizen Blog
- Michigan Interfaith Trust Fund
- Michigan Future (WWJ)
- Michigan Nonprofit Association's blog
- Michigan Prospect
- Michigan Public News Service
- Michigan Radio
- Michigan Secret Court
- MLive.com Blogs
- Political Graveyard
- Red Tape Blog (Government Documents Librarians of Michigan)

National Alternative Media:
- Air America Radio
- BlogTalkRadio
- BuzzFlash
- ePluribus Media
- Indymedia
- New Journalist Program (Center for Independent Media)
- PoliticsTV

National Blogs:
- AFL-CIO Weblog
- BlogPAC
- Daily Kos
- Firedoglake
- From The Roots (DSCC)
- The Gavel (Speaker's Office)
- Huffington Post
- HuffPo: Rich Robinson
- Kicking Ass (DNC)
- MyDD
- My Left Wing
- The Next Hurrah
- Open Left
- The Thicket (NCSL)
- Senate Guru
- Smart Ass (CDA)
- The Stakeholder (DCCC)
- YDA



© Michiganliberal.com, LLC
Site content may be used for any purpose without explicit permission unless otherwise specified.
Powered by: SoapBlox