Posted on Tue, Oct 27, 2009 : 2:20 p.m.
Sales tax proposal is a good start toward reforming Michigan's antiquated system
By Cindy Heflin
A package of bills introduced by State Rep. Mark Meadows, D-East Lansing, represents a sensible start toward reforming Michigan's antiquated tax structure, The Detroit Free Press says in an editorial today.
"Meadows' proposals would reduce the state sales tax to 5%, extend it to most services, and repeal an onerous business tax surcharge that critics say has discouraged employers from locating or expanding in Michigan," The Free Press says.
The editorial says broadening the sales tax makes sense because the economy is increasingly based on services, rather than manufacturing.
Comments
Janelle Baranowski
Wed, Oct 28, 2009 : 3:49 p.m.
It wouldn't be extended to physician services. But why not leave the tax at the current rate or up it a little bit and eliminate business taxes altogether? Right now, because of our onerous MBT, we have to lure companies with huge incentives costing hundreds of millions of dollars. - I would like to see business taxes repealed for all companies with gross receipts of less than $25 million per year (this number is based on the SBA guideline defining small businesses.)If we truly want to diversify Michigan's economy, we need to incentive the creation and relocation of small businesses. - If we didn't have the business tax, we wouldn't need to offer millions in rebates and funds to compete with other states. - www.some-other-viewpoint.blogspot.com
John Galt
Wed, Oct 28, 2009 : 11:07 a.m.
As a business consultant, I would just relocate to another State if my services were taxed. I already pay income taxes and sales taxes (I a am single member LLC business who pays taxes on a Form 1040 Schedule C.) My clients are located nationwide, and there is no reason why I should be subjected to more taxes.
shepard145
Tue, Oct 27, 2009 : 10:41 p.m.
Democrats are once again trying to hold onto their expensive social programs by taxing more jobs out of Michigan! This time its the service industry. Whether you know it or not, the professional service industry in Michigan has been devastated with massive unemployment far above the state average. Not only attorneys, but architects and engineers are probably closer to 35% unemployed as commercial business expansion and banking has ground to a stop. This democrat tax increase will compel national firms with offices in Michigan to close them while providing a competitive disadvantage for firms pursuing work outside Michigan, barring them from that work. Conversely, such a tax will provide a wonderful boost to out-state firms who do work in Michigan who will not be subject to the tax! There are NO EASY ANSWERS. The truth is that Michigan will continue to suffer as we did under Carter when government also ignored who employs Americans. When money is taxed, it is withdrawn from our already weak economy and sent to Lansing to spend.and THAT is why unemployment continues to rise. HIGHER TAXES are NEVER the answer!!
st.julian
Tue, Oct 27, 2009 : 2:41 p.m.
The definition of service may be to broad. A service tax may include software and IT. As such it could cause software development to relocate. In addition, the tax would apply to doctor's ad health related services. I recall that the legislative geniuses in Lansing opted to put a 3% surcharge on Doctor's revenue. Would this be a double tax on doctors? A sure way to keep them here.