The budgets of state government departments are moving through the Michigan Legislature with relative ease in recent weeks, thanks in large part to the influx in new cash provided under the acrimonious budget fight that almost led to a governmnet shutdown last fall.
But now the bills are coming due for the last-minute 22 percent surcharge the governor and legislators added last fall on the already complicated new Michigan Business Tax.
Consider John Bonanni, owner of several pet supply stores in Macomb County. According to Crain’s his state business tax bill is going from $26,000 to $81,000. Jerry Grubb, owner of an Oakland County day care, is seeing his state business tax bill rise from $1,990 to $8,440.
“That’s an amount I could have given as raises, used to retain key people with a higher wage rate,” Grubb told Crain’s.
The MBT surcharge tends to help manufacturers and small businesses but hurts some other businesses in the vast middle. The surcharge was the cost of killing the arbitrary and ill-conceived services tax passed earlier last year.
The surcharge was the cost of failing to make fundamental, money-saving reforms as recommended by the governor’s own bipartisan Emergency Financial Advisory Panel.
And the deep animosity of business owners and voters like Grubb and Bonanni is the cost to elected leaders who, in the face of considerable long-term public financial headaches, continue to put off the toughest work of governing: reforms.
4 Comments
The solution is the Michigan FairTax!
Change our tax structure in a way that does not affect the budget but drives our economy forward while having a progressive tax system that is fair and by choice!
As the owner of a small manufacturing company I can tell you that we will pay more than we did under the old SBT.
Between never ending high unemployment & workers comp, increasing property taxes as value of our building falls, & this new MBT, our business finds that we are paying substantially MORE in taxes than we did 5 years ago AND we are no longer showing a profit.
Our legislature is full on union people that refuse to make real reforms in our state budgets. They want to be everything to everyone, from state employee, to welfare or disability recipients.
Well, that is everyone except the businesses that keep the river flowing.
We are in a depression, and with continued decisions like Lansing is making, I don’t see it ending anytime soon.
Good luck to us all.
–”The solution is the Michigan FairTax!
Change our tax structure in a way that does not affect the budget but drives our economy forward while having a progressive tax system that is fair and by choice!”–
….
And what would that be? can we have some serious details or is this just a generalized exclamation with no substance?
—
“Our legislature is full on union people that refuse to make real reforms”
….. ?? what the heck?
Republicans are Anti-Union. The Senate is currently Republican controlled. The House of Reps was Republican controlled for many years prior to jan 2007.
Prior to Jennifer Granholm we had a GOP governator for many years….
What was it again that they did to reform our Tax structure? business or individual?……
This is the same political statement of fear and loathing that gets tossed around constantly. The GOP was in control of all 3 pieces at one point and in control of each for a substantial number of years.
Yet, NoT a 1! took any interest in
“Reforming” the SBT in all those years, until it came to a head as a dumb political move that made our state credit rating take a nose dive for a year thanks to the state GOP and dick devos claiming that was keeping everyone from hiring new workers. ..whatever!
..When is Dick going to tell us how many new people he hired once the SBT was wiped out?
So then it came to a head and became a serious intensive issue, and NOW business owners speak out and complain of the new one.
None of the Republican controlled House and Senate for years of Granholms first term did anything to fix a spiralling-out-of-control budget problem that they knew was a problem and kept band-aiding it each year.
Finally the dems take control of the house and try to fix it, and the GOP supporters come out of the woodwork to blame the Dems and Granholm for it all of a sudden. “ohh look what they did, those union sympathizers, darn those good wage jobs!! and terrible politicians trying to fix a problem created by republicans in a hurry, and under duress!”
You certainly cant point to Engler’s dropping of the state income tax for years as a “Boost” to michigan’s economy since there shows no evidence of it having any impact on our economy over the last 6-7 yrs.
Yeah, lets cut more taxes, that’ll sure “boost” the economy, just like we’ve had for the last 8 yrs. Yeah, sure did combat the job losses from the automotive sector…
Lets just be realistic here about whos been doing what and why, becuase if you dont know what your politicians have been doing and even who they are, then you need to find out before you know who and why and what to criticize about.
I actually began paying payroll taxes in OH in 1979, and modestly provided a few opportunities. I have considered an entrepreneurial enterprise recently with ‘jobs’ as a serious part of the equation. It looks like subcontracting is a simpler route than the weight of employment with employees in MI. Hmmmmmmm could move back to OH . . .or that great state of Texas!