Wednesday, November 21, 2007

Senate passes a "Really Bad Tax"

Yesterday, the Senate passed a replacement for the 5% tax on services, which they already repealed. The replacement is similar to the House passed version of a surcharge on the Michigan Business Tax of 33% to all businesses who pay the MBT, with the exception of the 20 or so largest corporations, who will pay a cap on the surcharge of $2 million, (saving them tens of millions).

The Senate passed version, reduces the surcharge to 13.85% and raises the cap to $7.5 million. It also assumes the $220 million "windfall" that the new MBT already brings in vs. the old SBT, and spreads it out over three years. So now, rather than a $625 million body slam to business, the Senate version is "only" a $560 body slam to business.

The bottom line is this: On October 1st, the legislature amputated the right arm of businesses in this state (without anesthetic, or sutures) and on November 20, the Senate sewed the arm back on...down to the elbow.

You call this a solution? What happened to the spending cuts? Why must the business community be forced to make a $560 million payment to government (on top of the $750 million in new income taxes) to support their continued bloated growth? When is the legislature and the governor going to recognize that this state's economy is already in the tank and about to get sucked down the drain?

It is high time for a reality check. The business community isn't even angry anymore; they have descended into despair and hopelessness. You think 7.7% unemployment is bad? Wait 'til next year!

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