Turning the Economy Around: Which Taxes Will Help Grow Business?

By: Tony Tagliavia Email
By: Tony Tagliavia Email

If Michigan's economy is going to turn around, new businesses will have to be started, those already in the state are going to have to grow and Michigan will have to attract business from elsewhere.

It's why the state is replacing it's business tax with a new one. Now businesses are talking about what they'd like that new one to be.

"We want to make sure the new tax structure rewards entrepreneurs," said Todd Anderson, vice president of government relations for the Small Business Association of Michigan.

The group favors credits to help sprout new businessm and a business income tax. Such a tax is part of both plans on the table.

An income tax isn't perfect, economists say, because it fluctuates with the business cycle, leaving the state with a less stable revenue source.

In the state House plan, the income tax would represent a little less than half of the revenue. It also taxes what's called net worth -- everything a business has minus what it owes, or assets minus liabilities. The House plan would replace all the revenue from the old tax.

But the state's auto dealers association has concerns.

"The tax bill has a very high business income tax rate and we don't qualifty for many of the credits," a representative told the finance committee of the state Senate.

The Senate's bill would bring in less money than the old tax. Businesses would be taxed on income and on gross receipts -- a tax on when businesses sell their goods. That's an issue for some manufacturers.

"We sell a lot of goods and if you sell a lot of goods you have a lot of receipts so it hurts us," said Chuck Hadden, head of the MIchigan Manufacturers Association.

General Motors is a key part of Lansing's economy -- and the economy throughout the state -- so where does it see the tax proposals?

"We would receive a reduction in the business taxes we pay in Michigan today," under the house plan, which GM Tax Director Richard Zablocki says the company supports.

That plan cuts the tax manufacturers pay on their equipment.

But some Republican senators say they're worried that plan is too big a handout to the Big Three.

Some compromise proposal will have to be reached. It's unclear how long that might take.


You must be logged in to post comments.

Username:
Password (case sensitive):
Remember Me:

Read Comments

Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Neil Location: Rogers City, Mi. 49779 on May 14, 2007 at 03:23 PM
    We are a small Hardware store which is going on it's 3rd generstion. Everything you here is that we need more money, so raise taxes somewhere or give tax breaks for new business. The thing that has to happen is to get this country and state back on it's feet is to make it so they can compete with other countries and make money. The one way is to check into TARRIFS again to take up the slack on taxes and help the US "in" country businesses compete again. Just think about how many good paying jobs have been lost in the last 10 years even. Now times that by how much they would pay in taxes each year and times by 10. People have to look at the big picture. When this country was self efficient and most people had good jobs, it didn't have the problems it does today. We could set our prices on product to make money for the owners and the workers because our product was quality and people could afford them because they had good jobs. Other countries wanted there product in here and didn't care about Tarriffs. Between people that made good money(example-car industry) in this country getting taxed on it and the Tarriffs, the goverment in Federal and State didn't have all these problems. I know I didn't give you an answer you wanted, but we the people and businesses can't afford any kind of taxes. We are getting taxed to death. TARRIFFS are the right taxes. Ask yourself this question. Why do we let other countries and businesses that operate out of this country become rich at our expense????? Make it so it cost more to bring it into this country so businesses start up again and we can get the Middle Class growing again. The middle class to me paid most of the taxes on percentage in this country while the rich like always write taxes off and the poor don't have money to pay. Well sorry if this didn't help you!!! But I think we better look at the big picture. Thanks!! Neil
  • by Pierre LaVoie on May 14, 2007 at 08:58 AM
    Please contact me if you want to make a difference for Michigan's future...Learn more about the Small Business Association of Michigan, including how to develop a business plan, free fact based legal and human resource advice, access to affordable health care and our lobbying efforts to reduce the cost of health care and burdensome small business taxes. 517-492-1223 or pnl@sbam.org...also on the web at www.sbam.org
  • by Darlene Location: Warren/Ortonville mi on May 11, 2007 at 07:08 AM
    I am currently contemplating a move from Michigan due to the current taxation. I have made many cuts to my personal budget and I have nothing left to cut. I see a legislative body that seems to embrace more taxation on a dwindling middle class. Where will revenue come when the middle class moves due to the many taxes it is burdened with? How will Gov. Granholm increase revenue when the higher paying blue-collar jobs are gone? The answer lies in cuts to a government made fat by the auto industry. The auto industry is gone and so are the benefits enjoyed by all. I am angered that my Government from the local to the federal continue to expect us to foot the bill for useless programs. In my township, the government went forward with a recreation park so the Supervisors wife could have job security. Homes are in foreclosure and we need to build a new park????!!!!! I have seen first hand how some of the government officials work.......or don't work! I am furious that these officials are not making concessions in any of their benefits when everyone else is. However, taxpayers have an apathetic attitude toward protesting and getting involved. Legislature will NOT respond to small numbers of protesting taxpayers; they need to see VOTERS out in numbers protesting the current waste in all levels of government. Put down your remote and get involved or just wait until you can no longer afford one and you can't pay for the electricity to operate your TV. Can you get off your butt then? Mifairtax.org has some good information for you to get involved.
WILX 500 American Road Lansing, MI 48911 517-393-0110
Copyright © 2002-2016 - Designed by Gray Digital Media - Powered by Clickability 7449021 - wilx.com/a?a=7449021
Gray Television, Inc.