TAX DEBATE CONTINUES TO DOMINATE AIRWAVES

Potential Michigan Business Tax (MBT) elimination, replacement and other associated issues were again abuzz around Lansing as policymakers continued the debate on how Michigan’s tax structure can be utilized to revitalize the State’s economic woes.

Although he has indicated he won’t move the measure prior to the Governor’s budget presentation of February 17^th, Senate Finance Committee Chairman Senator Jack Brandenburg (R-Harrison Township) held a hearing and took testimony regarding SB 1, Sen. Dave Hildenbrand’s (R-Lowell) legislation to eliminate the MBT and the 21.99-percent surcharge. Groups such as the Michigan Chamber of Commerce, Michigan Taxpayers Alliance, the Mackinac Center for Public Policy and Americans for Prosperity lined up to testify in favor of eliminating the tax, an estimated $2.1 billion hit to revenue for fiscal year (FY) 2011 and $2.2 billion for FY 2012.

The panel also took testimony on Senate Bill 34, Senator Mike Nof’s (R-Battle Creek) legislation to eliminate the State’s Personal Property Tax (PPT). While it appears all agree the tax, levied on equipment purchased by businesses, is bad for economic growth in Michigan – the roughly $880 million received by local governments would send dozens into insolvency if eliminated and not replaced.

The Senate also saw excitement when Senator Roger Kahn (R-Saginaw) introduced SB 103, legislation to eliminate the Earned Income Tax Credit (EITC). Elimination of the credit, estimated to cost roughly $340 million, will likely be the first significant fight for the new Legislature as Democrats wasted no time in attacking those in favor of the measure and characterizing it as a tax increase on the working poor. The philosophical disagreement appears not to be just along party lines as House Tax Policy Committee Chair Representative Jud Gilbert (R-Algonac) has made his position against eliminating the EITC clear, while House Speaker Jase Bolger (R-Marshall) has stated that the measure will be included in a package of tax incentives being examined by the House.

posted by PAA Online , Friday, February 11, 2011 1:11 PM
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