A ballot proposal to
raise the Corporate Income Tax from 6 percent to 11 percent and dedicate the
$900 million raised to roads is being supported by the Citizens for Fair Taxes.
The Michigan Laborers, International Union of Operating Engineers, and the
Michigan Regional Council of Carpenters and Millwrights are the unions who have
joined forces to create the Citizens for Fair Taxes group.
The group believes
that they are simply recovering lost revenue, which resulted from Governor
Snyder cutting the Michigan Business Tax. Citizens for Fair Taxes has also
argued that corporations are frequent users of the state’s infrastructure,
meaning they have an obligation to pay into a road solution just as the
citizens of the state do. According to the House Fiscal Agency, the combined
tax revenue from corporations just eclipsed $100 million, coming in at $137.6
million.
In order for the
proposal to become law it must first receive 252,523 signatures from registered
voters, as it is a voter-initiated act. Following the gathering of signatures,
the legislature has 10 days to act on the proposal. If the legislature chooses
not to act, which would most likely be the case, the act will go on the
November 2016 ballot. If the act succeeds in the election, the new corporate
income tax rate would be effective as of January 1, 2017.
Many in the business
community openly oppose the proposed increase, as they state that it would move
Michigan back into the not so distant economic slump. The increase would put
Michigan as the state with the highest flat corporate income tax, with only
Iowa’s graduated tax, which has a maximum rate of 12 percent, beating Michigan
out as the state with the highest possible corporate income tax.
Many Republican-based
groups such as, Americans for Prosperity-Michigan and the Michigan Republican
Party joined business leaders throughout the state including, the Small
Business Association of Michigan and the Michigan Chamber of Commerce in their strong
opposition to the proposal.