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We have a business tax deal!

by: Hazen Pingree

Wed Jun 13, 2007 at 17:38:08 PM EDT


UPDATE by Hazen Pingree:
Here's the latest from the Associated Press:
Gov. Jennifer Granholm and legislative leaders Wednesday struck a deal on a long-awaited replacement of Michigan's main business tax, ending months of uncertainty that has frustrated the business community, including Wall Street.

The agreement would replace all of the roughly $1.9 billion a year now brought in by the Single Business Tax, which expires at the end of this year. The revenue neutrality of the plan is considered important to help Michigan tread water during its ongoing state government budget crisis.

"This new Michigan business tax will make Michigan competitive," Granholm said during a Wednesday afternoon press conference at the Capitol. "It will represent a tax cut for 7 out of 10 businesses in Michigan."

The Democratic governor was joined by Democratic House Speaker Andy Dillon and Republican Senate Majority Leader Mike Bishop.

Revenue neutral. Booyah! Something tells me this is not the deal Amway Guy, the Chamber, and L. Brooks Patterson had in mind when they rammed the repeal through last year.

Anyway, let's get this puppy to the gubernatorial desk and get cracking on fiscal year 2008!

Hazen Pingree :: We have a business tax deal!
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Leon Drolet, this thread's for you... (0.00 / 0)
Grover Norquist said this is a tax hike ... care to comment?

Among the Trees

(crickets chirping) n/t (0.00 / 0)


"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 ]
Mikey Likes It (0.00 / 0)
He hates everything.


(AP Photo)

He Likes It!  Hey, Mikey!


Great news! (0.00 / 0)
I just hope there's no Devil in the details.

DeTails (0.00 / 0)
At least there's no DeVos in the details.

Interesting that one day after DeVos visited the Senate Republican Caucus, the Senate Republicans, like Michigan voters before them, rejected DeVos's approach to the Single Business Tax and agreed to raise taxes by $2 billion--a full replacement of the SBT.

From the Muskegon Chronicle, October 31, 2006:

GRANHOLM: Agrees the SBT needs to change but says any substitute plan must replace the full $1.9 billion now collected annually with the SBT, saying not replacing the money could lead to more crowded classrooms, less money for towns and cities to spend on police and fire services and less health care for the poor and elderly.
Would create a business tax similar to the SBT but with a 40 percent lower tax rate for small businesses that pay the
tax (many don't) and 37 percent lower for others. Would bring premium taxes on insurance companies more in line
with the national average by doubling the tax to 2 percent. Would make business taxes more reliant on profits and less on salaries and health care. Would eliminate some business tax exemptions.

DEVOS:  Supported the Single Business Tax repeal, calling the tax a job-killer. Plans to replace at least half of the $1.9 billion in revenue with some type of business tax, but hasn't offered specifics. Says there is enough waste in state government that can be cut to make up any lost revenue without hurting important state services. Says he won't increase taxes on individuals to make up the difference.
Wants to further reduce personal property taxes on technology and equipment. Would make any business tax less reliant on health care and salaries.

So despite a pep talk from the Amway Guy, the Senate Republicans caved and went with the Granholm approach.


[ Parent ]
So... (0.00 / 0)
Is the budget going to be balanced now, or do we still have more work to do?

Halfway there (0.00 / 0)
This deals with roughly half of the problem (about $1.9 billion). Next we have to deal with the hole in the fiscal year 2008 (which was made considerably larger when it was agreed to kick 2007's deficit down the sidewalk to allow Bishop to save some face on his "no tax hikes in '07" position). Here's what Peter Luke has to say about that:
Now Granholm, Dillon and Bishop have to agree on a 2008 state budget plan that is way behind schedule. In broad terms, the three have already agreed to some $1.5 billion in new revenue through an unspecified combination of income and sales tax increases and the elimination of some tax breaks.

The apparent goal is get those taxes approved by July 1 and then begin work on the spending plans of individual departments. The 2008 fiscal year begins Oct. 1.

Unfortunately, with the auto industry in the crapper, it's likely tax revenues will drop again and again, making any victories we have short lived. So drink lots of beer and enjoy them while you can.

"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 ]

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