One of the clearest facts in Michigan’s muddy politics is the unanimous hatred among business groups of the Michigan Business Tax surcharge. Many have vowed repeal of the surcharge since the day it was passed a couple years ago.
Yet the business groups share some of the blame for that tax because they allowed themselves to be divided and conquered in the state budget meltdown of 2007.
Everybody in Lansing knew in 2005, 2006, and 2007 that the state tax system was ripe for an overhaul. (Sadly, the need for tax system overhaul is more urgent than ever.) But, back then, the business groups all trotted out their own individual tax reform plans full of differing accounting, finance, and taxation schemes.
In the end, the business groups didn’t get any kind of sustainable, long-term tax overhaul. They got stiffed, in part, because they weren’t on the same page.
That’s why Wednesday’s news out of a Detroit Regional Chamber of Commerce board meeting is pretty interesting…
“This morning, the Board of Directors of the Detroit Regional Chamber voted to endorse the broad outlines of the Business Leaders for Michigan Michigan Turnaround Plan… The Chamber does not support every element of the plan, but firmly believes that Business Leaders for Michigan has crisply and compellingly presented the case for fundamental change. In supporting the Business Leaders for Michigan Michigan Turnaround Plan, the Detroit Regional Chamber calls attention to the following:
1. While there can be legitimate debate over the details and implementation of the Michigan Turnaround Plan, the Detroit Regional Chamber supports bold and holistic actions that result in an improved business climate in Michigan.
2. The Michigan Turnaround Plan is a sequenced plan – with five steps. The Detroit Regional Chamber believes that structural reform must come before new tax schemes
3. The Detroit Regional Chamber has a long-standing position opposing a new tax on services – unless such a tax is implemented in a manner that decreases taxation rates and is paired with fiscal savings. The Chamber continues to endorse this position.”
This potentially puts two leading business groups into a more cooperative relationship. It sets a tone for further collaboration with the wide range of other business groups circling the capitol in Lansing.
And it may help set the stage for dramatic change along the lines of a “grand bargain” of spending reform, tax reform, and a sustainable state budget revenue system. Talk of that grand bargain continues to emerge from many corners in Lansing.
But don’t expect change until after the November election.
The prevailing mood in Lansing right now is one of complete disinvestment in the status quo leadership.
There’s just no belief that anything substantive will emerge from the Bermuda Triangle between the governor, the senate majority leader, and the speaker of the house.
It’s a triangle into which so many good policy ideas – from Republicans, Democrats, and outside interest groups alike – are not negotiated, but instead disappear right off the radar screen.
2 Comments
Let us say that the essence of what your saying, of the 5 step Turnaround Plan, is spending reform, tax reform, and a sustainable budget revenue system. Spending reform means to me downsizing the state and spending less. Tax reform, to me, means eliminating business taxes to end the recession. A sustainable budget revenue system means that the recession is over and tax revenue is growing each year; business activity and employment is growing.
Your article starts off great. You nailed the cause of the business taxes that were implemented (the so called MBT). Businesses failed to unite behind a reasonable plan. However, I noticed that you failed to mention that the MBT only replaced about 50% of the taxes that were cut. The MBT screwed us all, including every citizen in Michigan, because our State coffers are empty every year. This forces cuts every year, which leads to a bad image for Michigan business.
Unfortunately, the end of your article is sort of a JOKE. The Detroit Regional Chamber of Commerce says that they refuse to “reform” the system until structural changes are made. REALLY? So we’ll live with this crappy system, that leaves our coffers empty every year? Our Michigan Economy will continue to suffer with talks of cuts from here to eternity? What a JOKE!
The only structural reforms necessary are reasonable taxes. If you’re not willing to move forward in that arena, what makes you think that you can force unreasonable structural reforms on the workers? NOT GONNA HAPPEN. Sounds like a stalemate to me.
Structural reforms have already been implemented. We cut the General fund by 35%, despite a drop in the economy of only 6%. Now you want blood from a stone? Laugh out Loud, my dear “business” friends. You may succeed in galvanizing an entire generation against you. Perhaps you’d like to contend with 9 million pissed off citizens?