Wednesday, November 7, 2007

Out of the fryin' pan, into the fire.

You have heard that the 6% tax on selected services, delivered primarily through a broadside slam on businesses, is in jeopardy. The $670 million hit on the "moms and pops" of Michigan is so bad, that even the governor has acknowledged we need to "fix" it.

On October 31st, the House Republican caucus courageously took the lead and released a list that shows how we can eliminate $670 million worth of government immediately, thus negating the services tax. The list is at the bottom of this post. It is really quite simple: either we take $670 million out of government, or we take it out of the private sector, the wallets of the working people of Michigan.

Well, it looks like the "fix" is in. The Democrats who are loathe to tell us anything about what they are planning, are apparently ready to "release the hounds" tomorrow. Looks like they will repeal the services tax and tie it to a new tax, probably an expansion of the Michigan Business Tax.

This is really an incredible series of events. The Dems are apparently blind to the fact that they are strangling the private investment and potential job growth in this state. On top of that, they don't seem to want to even ask for input from the Republican side of the aisle, let alone inform us in advance of what they are up to.

We have gotten used to having legislation rammed down our throats at the last possible moment. For two days this week, we have done virtually nothing. Today, the only vote we took was on a non-binding resolution to chastise the President for vetoing a water bill. Tomorrow, on the last day of session before we go on that important hunting break, they will drop in the bills to "fix" the services tax.

Watch this space tomorrow around lunch time as we go into session. As soon as I know what they are up to, I will let you know.

Meanwhile, you might want to contact your state representative and ask them to vote to repeal the services tax and then cut government, just like you have had to cut your family budget. Find them here:

Sales Tax Repeal Deficit Solution Options

--Five percent legislator pay cut - $600,000
--Michigan Business tax transition windfall* - $219,400,000
--Reexamine state employee benefits - $100,000,000
--Department of Information Technology Reduction - $10,000,000
--Competitively bid corrections services - $50,000,000
--Eliminate tax exemption benefiting prisoners - $3,000,000
--Streamline the Department of Community Health - $92,833,331
-Reduction to Healthy Michigan Fund programming
-Restructure Wayne County Community Mental Health
-Reform 19-and 20-year olds non-mandatory coverage
-Reform non-mandatory Medicaid caretaker coverage
-Invest more money into Medicaid fraud investigations
--Department of Human Services reforms - $109,499,998
-Four-year limit for able bodied welfare recipients
-Privatize daycare eligibility
-Daycare rate uniformity

--Stop new appropriations to 21st Century Jobs program - $75,000,000
--Eliminate the Community Service Commission Grant to train volunteers - $3,190,000
--Remove the increase to the Treasury Department to implement the new taxes - $8,900,000
--Continued reduction of public transit funding - $5,000,000

GRAND TOTAL in savings from the House Republican plan: $677 million

Proposed revenue from the 6% services tax: $614 million

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