Saturday, December 1, 2007

Tax on businesses to go up 22% immediately

I what has become the typical modus operandi, the Legislature has decided to act late. Today at 3:30 the House is to go into session and pass a single bill to repeal the service tax which took effect last night and replace it with a capped surcharge on MBT liability to any business that pays it.

Effective immediately, any business that generates over $350,000 in business activity, will have to calculate its Michigan Business Tax liability and then add 22% to that bill.  Over 60,000 businesses in this state will see their tax bill, the MBT, go up by 22%.  Large corporations will get a break because the maximum liability on the surcharge will be capped at $6 million.

Remember last year when we repealed the Single Business Tax?  The governor said the replacement for the SBT had to be "revenue neutral".  The Legislature produced the MBT as a replacement, which economists and analysts are now saying will produce more revenue than the SBT.  Guess what? It's a moot point because the governor, aided by her Democrat legislators, and with the help of some Republicans as well, has just pulled off a 22% tax increase to virtually every business in the state.

The good news: you won't die by firing squad. The bad news: you may die of suffocation. Over time many businesses are going to find it hard to breathe...

I will be blogging from the House floor with updates. Read  here.ok forward to supporting this effort.

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