In the wake of the Administration’s release of a discussion draft for replacing the Michigan Business Tax (MBT) with a 6-percent corporate income tax, many related discussions have begun surrounding potential revenue replacement measures and other details. In addition, both House Tax Policy Committee Chair Representative Jud Gilbert (R-Algonac) and Senate Finance Committee Chair Senator Jack Brandenburg (R-Harrison Township) have indicated that, so far, they like what they see.

One potential factor in the MBT-replacement debate is in regards to the fate of those tax credits to which the State has already committed. The Administration is evidently considering a plan that would honor credits such as the Michigan Economic Growth Authority (MEGA), renaissance zone and Brownfield development credits issues under current law.

Meanwhile, elimination of the personal property tax (PPT), an issue many were disappointed did not find its way into the Administration’s original proposal, is evidently still alive as Lt. Governor Brian Calley indicated the Governor’s recognition of the problems with the tax on companies’ investment in equipment and other capital.

In regard to the potential for an elimination of the Earned Income Tax Credit (EITC), proposed as a possible budget-balancing measure related to a business tax cut, the Michigan Catholic Conference, AARP, the Community Economic Development Association of Michigan and the Michigan League for Human Services have voiced their opposition. The EITC is a tax benefit for low and moderate-income working individuals and families.