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1) MBT vs. SBT [by Anonymous Citizen on October 7, 2008]
I am sorry. But I have come to the realization that tax cuts don't really exist. There are only cleverly crafted tax "shifts" out there. Sure, some of them target particular groups of people and make for a larger tax burden for them, but from my years of being a small business owner, I have seen taxes get eliminated, just to have a new tax be implemented.

When the SBT was to be eliminated, I new it was just a matter of time before there would be a substitute tax. However, I was shocked that my tax burden practically doubled with the introduction of the MBT.

Why can't this tax just be eliminated too and put in place a "fair" tax that everyone in the state takes part of. An abolishment of the state tax AND the MBT with a higher sales tax could be a good leveling field. But nooooooo, that would be too simple. Let's face it, I live where there are a lot of tourists from out of state that visit. A higher sales tax would not stop them from visiting, especially when they already are used to paying a higher rate in their own state. If we want this state to compete, and jobs and industry to come back, the business climate has to change from a climate of punishment to an environment that promotes prosperity. Of course, as long as politicians keep twisting simplicity into a byline that helps make them look good on election day, out state will continue to be doomed to die. As I have heard more than once: To the last one to leave the state...turn out the lights. So the exodus continues.
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2) "journal statement" [by Admin003 on April 27, 2008]
Senator Cassis asked and was granted unanimous consent to make a statement and moved that the statement be printed in the Journal.

The motion prevailed.

Senator Cassis’ statement is as follows:

Talk about sticker shock. In the Finance Committee, a small business—and I want to emphasize that this was a small business technical company—shared their new Michigan business tax estimate using the NFIB estimator. It serves as a startling example and let me illustrate in real life what is happening out there. This company’s total gross receipts are just a little more than $13.5 million. The owners, when you pool their compensation, it comes to $853,000. When you go down their form, this is what is so potentially startling. Can they claim the investment tax credit? No, so it becomes a zero. Can they claim the compensation credit? No, zero. Less the MBT APT credit, zero. Less the cliff phase credit, zero. Less the personal property tax credit, zero. Less the new vehicle dealer credit, zero. The only thing they can qualify for is a compensation credit at approximately $14,557,000.

This business, though small, did not qualify for the alternative profits tax. Their total Michigan business tax liability plus the surcharge comes to almost $142,000 this year. Previously, under the single business tax, coupled with their personal property tax liability, they owed the state of Michigan $25,000. This year they would owe almost $142,000. Incredible? No. One of the more extreme cases? Well, possibly. But we, all of us, have heard the Detroit News, the Detroit Free Press, in Finance Committee testimonies, written CPA documentation, e-mails, calls, and letters that so many businesses have seen their liabilities jump two, three, four times. And I submit that many of you have probably received what I have.

We have learned that the new Michigan business tax benefits the smallest companies; those that don’t pay or don’t have receipts of more than $350,000. It benefits them and it benefits Michigan’s largest manufactures that don’t have liability. Those in the middle are significantly impacted and left behind—those who don’t qualify for the credits and those not getting special tax treatment relief. Then those in the middle get slammed with a 22 percent surcharge.

I am sure we did not intend for this to happen. Those businesses are the most and vast majority of taxpayers and job providers. Is it any wonder that they are feeling abandoned? So faced with increased tax liability, they have no choice and we’ve heard this, ironically—to cut more jobs which really, really impacts human beings’ lives. Many of these same businesses have told us, “I may be hanging on for now, but we’re planning our exit strategy out of Michigan.”

It is the thousands and thousands of small and middle-sized businesses that Senate Bill No. 1198 addresses. It will provide fair, balanced tax relief. The end result truly should be real economic stimulation and real employment. Specifically, Senate Bill No. 1198 expands the number of small businesses, at least somewhere between 10,000 to 15,000 that would be able to qualify for the 1.8 percent alternative tax rate. And, importantly, it expands some Michigan entrepreneurial credit. The ME-2, which, and I am so pleased to say this public ally, seemed to be referenced and expanded by the Governor, our Governor, in her State of the State address. It would allow more companies, the gazelles, those ready to take off and go, to qualify for the Michigan entrepreneurial credit.

So I urge your support. I urge your positive vote on behalf of all the small and middle-sized companies in our state.

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3) "no vote explanation" [by Admin003 on April 27, 2008]
Senator Prusi, under his constitutional right of protest (Art. 4, Sec. 18), protested against the passage of Senate Bill No. 1198 and moved that the statement he made during the discussion of the bill be printed as his reasons for voting “no.”

The motion prevailed.

Senator Prusi’s statement is as follows:

The bill that you are about to vote on would have been much more acceptable had you taken the time to look at what’s happening with the unemployed people in the state of Michigan, instead of focusing on people who have already received a significant tax break during the adoption of the MBT. This bill retreats from two negotiations that were done last year that kept the MBT revenue-neutral, and it vastly increases, as was said, the number of businesses that qualify for the 1.8 percent MBT special rate on small businesses by allowing officer compensation, which is currently capped at $80,000 to rise to $250,000.

Now, before we enacted the MBT, the SBT capped at $115,000. Under the MBT, we gave them a $65,000 increase. Now you want to add another $70,000 so that people who are making a quarter of a million dollars in the businesses can keep an extra $70,000 in their pockets, rather than put it back into their businesses and achieve some tax relief.

The treasury estimates that the cost of this bill is $250 million. The Senate Fiscal Agency estimates a $254 million cost for a full year of this tax break. This is going to something. If you watch what we did last year and the tax votes that we put up, there were 19-19 ties and the Lieutenant Governor had to break the tie. Yet, just a month later under the extended budget, I saw a lot of green votes go up on the other side of the aisle so that you could go back to your districts and, on the one hand, say that you voted against taxes; but on the other hand, you came back and said you voted to spend more money on education, health care, and all the things that matter to our shared constituency.

You already voted on a bunch of budgets, the first House bills that left this chamber not so long ago that were based on a certain revenue number, and the bulk of you voted “yes” on them. Now you are going to turn around and vote to take $250 million out of that revenue stream so that you can again go back to your districts and talk about how you voted to cut taxes but voted to increase spending.

At some point, the dichotomy of these actions are going to catch up with you because, at some point, the press is going to wake up over there and point out to the readers and the viewers of the state of Michigan just how obvious it is that you want to take it both ways. I think that is going to get tougher and tougher once the people are informed as to what’s going on here. So you can have it one way or the other, but you can’t have it both ways.

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