Under the new Michigan Business Tax, you have to pay a 22% surcharge unless you are below a certain threshold in total revenue, total net income and total "personal income". That third number is $180,000. So, if your small business pays you a salary of $180,000 or more, you pay the surcharge.
I talked to a small business owner the other day. He has 5 employees. Unfortunately for him, two of his employees are his married daughters. They are part of the family business. The MBT includes a clause for what is called "attribution". Anyone who works for the business who is part of the family is attributed as the same person for total personal income purposes.
So, this poor guy, who paid $10,000 in Single Tax liability last year, has to pay $55,000 this year. Why? Because his personal income from the business, combined with his daughters' personal incomes, amounts to more than $180,000!
Like I said, there goes the family business.