Compared with what his company paid under Michigan's hated Single Business Tax, Bronner's will pay about 500% more now under the new Michigan Business Tax, a supposed improvement over the SBT that took effect Jan. 1.
The increase includes a surcharge approved late last year so the state wouldn't go broke. The shock to businesses looking at their new tax liability could reopen the political debate over the state's business tax system and, even more broadly, Michigan's budget and fiscal policies as a whole.
"We've always been more than willing to pay our fair share of taxes here," Bronner said. "But it seems like a disproportionate amount has hit industries like us."
James Jenkins, a Southfield accountant, said last week that he's facing an even stiffer bump in his business taxes, from $1,000 a year under the SBT to $14,000 a year under the MBT.
"I've got clients that can move" out of Michigan, Jenkins said. "I suspect that some of them absolutely will if this becomes too penal."
Too much of a burden?
The increases stem in part from a shift in part of the tax burden from manufacturing firms to the state's growing service sector.
As part of Michigan's bitter, drawn-out debate last year on replacing the Single Business Tax, lawmakers in Lansing created the Michigan Business Tax to spread the tax burden more evenly. Manufacturers got some relief, while service firms were expected to pay more.
This spring, tens of thousands of firms are calculating their MBT bills to make estimated tax payments as required by law. "People are getting the first dose of the shock wave," Jenkins said.
State Rep. John Proos, R-St. Joseph, said Michigan could lose firms to other states, including nearby Indiana. The Hoosier state has begun to target Michigan firms with a marketing campaign to entice them to a less-taxing environment.
"This is at a time when Michigan's economy is struggling," Proos said. "Why would we simply take the arrows out of our quiver and give them to the State of Indiana to fire back at us?"
A couple of notes
First, note that Ohio doesn't appear to be a viable option for Michiganders as a relocation option.Second, if you are a "progressive" ask yourself this question. Are businesses more or less likely to set up in Michigan as a result of this tax?
The clue phone is ringing for Ohio, will the state pols like Marc Dann pull his pants up long enough to answer it?
2 comments:
Surely society's producers will continue to move to red states. And even if a business does stay in Michigan, how can anyone, progressive or not, not see the ripple effect? For example: that accountant that has to pay an extra $13K in taxes. That's $13K less that he has to invest on any number of things: office equipment, computers, pay raises for his employees, and maybe even hiring a new employee.
What he has left to spend will be more likely to used for imports where the high tax will not be built into the product.
Somehow the private business owner has to get creative figure out how to bear the burden his government has laid on him. This creativity simply does not exist in government itself. Just soak the private sector a little more every day to cover up the incompetance.
It all translates back to more people looking for fewer and lower quality jobs in the state. How this gets by all these ivy league educated progressives is mind boggling.
Or is it? It never really has been about helping the disadvantaged. It's using the disadvantaged as a smokescreen for their power grab. And screwing the disadvantaged in the process. How disgustingly low can liberalism/progressiveism/socialism get? Apparently not low enough.
To add to your point... "Progressives" are arrogant they refuse to see how their governance has resulted in the flight of businesses.
Maybe they don't care about the plight of the greedy capitalist. Unfortunately, those are the ones who ultimately provide the jobs.
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