  Lowell Board Administrator Username: Lowell Post Number: 2286 Registered: 10-2003 Posted From: 66.167.211.50 |
"I like him. For one thing, Brooks has perhaps the best sense of humor in Michigan politics today. " The love feast follows. Jack Lessenberry is siding with the LBP plan to demolish the Single Business Tax in a confused editorial in this week's MT. By his admission, the SBT supplies one quarter of the state's general fund. So what is to be done? First he has to bare his CYA martyr syndrome comes out, “..even though his [Patterson’s] policies on urban sprawl are straight out of the 1950s, I have to confess something that will get me thrown out of liberal heaven.” Sorry Jack, I know a lot of local ‘liberals’ and I have never heard anyone ascribe to your outlook anything more liberal than somewhere right of center. You are safe in your personal hell. Then he moves forward boldly into the LBP universe, ‘But the more I thought about it, the more I realized that — given the total leadership vacuum in Lansing — this is probably exactly what we need to do.” “Probably exactly” – gotta love that solid assurance – talk about a vacuum. LOL He likens the move to the 1994 Engler school funding, but fails to mention that that tax reform gap was filled by raising the sales tax from 4 to 6%, a regressive tax that falls disproportionately on the poor and the young. His solution is to extend the regressive sales tax to services and then paints a rosy picture, “That would raise so much money that we could probably reduce the overall sales tax from 6 percent — what it is now — to 5 percent.” “Could probably” – gotta love that – This more likely ‘could probably’ drive service industries, where business growth is actually occurring, out of Michigan. In fact that is ‘probably exactly’ what would happen. Information based industries, in particular, can easily fly away; they are not burdened by plants and inventory. All this for what? To reward a dying industrial sector that is already swimming in state welfare handouts from MEGA and other sources? The source of this conversion? “This idea comes from Phil Power, the former publisher of a bunch of weekly newspapers.” Hmm... I wonder who used to work for Phil Power? The whole article smells ‘suck up, kick down’ “After all, we are paying our gutless wonders to make important decisions for the state. Unfortunately, they want to avoid making hard choices wherever possible, as does Gov. Jennifer "Aren't I Cute" Granholm.” Cuter than thou, my friend and gutsier. No tax cut without replacement, and certainly not one that shifts the tax on the poor and drives out the vibrant sector of the economy. | ||
River_rat Member Username: River_rat Post Number: 3 Registered: 02-2006 Posted From: 68.166.44.44 |
Why would anyone ever want to listen to someone like LBP? He only is the czar of what is likely the most successful county in the state. That would be a bad example to follow. the river rat | ||
3rdworldcity Member Username: 3rdworldcity Post Number: 207 Registered: 01-2005 Posted From: 69.214.190.1 |
Yeah, River_rat, LBP isn't smart, he's just lucky. Right? The MI SBT is probably worst , most counterproductive state tax scheme in the country. MI is a joke compared to other states where I have business interests. Has anybody ever relocated a business here from another state, or made a major expension, w/o SBT relief? Just asking. | ||
Spartacus Member Username: Spartacus Post Number: 85 Registered: 07-2005 Posted From: 209.114.251.65 |
I don't know what constitutes the general fund. But SBT plus Insurance Taxes equal 8% of the total budget (a little over 2 billion). I don't know the breakdown between SBT and Insurance taxes. The SBT tax is harmful in that it provides a disinsentive to growing revenue and hiring employees. It does not apply to profits. In addition, it is fairly difficult to calculate. Businesses spend lots of professional fees determining their SBT tax and trying to figure out ways to minimize it. I would consider these costs inefficiencies. Raising the sales tax is a disaster. It is regressive and is not deductible from your federal income tax. I think that eliminating the SBT is a great idea and will make Michigan more competitive compared to other states. To replace the revenue (assuming there are no more places to cut spending-- even though I know there are) there could be an upward adjustment to the income tax and the property tax. Maybe charge a little more to register a car. These taxes, for those who itemize, are deductible. In effect the federal government is bearing approximately 1/3 of the cost of the increased tax for those taxpayers. | ||
Matt_the_deuce Member Username: Matt_the_deuce Post Number: 502 Registered: 10-2003 Posted From: 69.14.248.252 |
Regardless of the SBT - LBP probably had it easier than any other county commisioner in the country. Located right next to a major city that was bleeding Capital like no where else. Shit - It had more to do with a myriad of socio-economic factors than LBP's "stewardship" of Oakland county. He may be right about the SBT - if he finds a way to pay for it that is fair to everybody, but I wouldn't confuse the two issues. He's smart and lucky. Lucky enough to be in the right place at the right time and smart enough to know how to fan the flames of divisiveness to his County's advantage. Yeah!!! We have such a great REGION!!!!!!!!!!!!! | ||
Deputy Member Username: Deputy Post Number: 86 Registered: 02-2004 Posted From: 63.115.132.100 |
Lowell, Some of your arguments don't make sense to me. First, the sales tax is regressive, but so, in effect is the SBT. Businesses just include any taxes they have to pay in their books as expenses. They just increase the price of their products to cover these expenses. A percentage of any product bought that was made from a company that pays the SBT in Michigan is actually paying a portion of that tax for the business. Therefore, since younger and poorer folks tend to buy more goods than services they are already getting tax at a higher effective rate. If the SBT were eliminated companies would not need to cover these tax expenses, thereby lowering their product costs and lowering the effective tax rate for those who purchase these products. And your point about the service industry jobs being able to easily flee also doesn't make much sense. How can your barber, law service, golf course, etc. leave the State. They cannot. Also, many service industries (such as Health Care and Education) would be exempt. So would business to business transactions (such as hiring an outside accountant at a small business). Eliminating taxes on businesses should be the first order of business in Michigan. We currently have the worst economy in the US (Except maybe a couple hit by Katrina) and it is because of the cost of doing business in the State. I would be willing to pay sales tax on services and/or higher State income taxes, if it resulted in a superior climate for creating jobs. People may complain about taxes but not as much as not having a job to begin with. | ||
River_rat Member Username: River_rat Post Number: 8 Registered: 02-2006 Posted From: 68.166.44.44 |
As an economist, it is frightening to watch the implosion of Michigan businesses. Taxing business drives businesses out of that jurisdiction. Do you need a better model than where we live? Right here in Michigan. Drives them right to other states that offer a more condusive tax structures. They provide jobs in those states - the jobs we do not have, and have lost, in Michigan. The folks in South Carolina, Georgia and Texas are rooting for more business taxes in Michigan. Unequivocally, there are other forces adding to the demise of businesses in Michigan; we all know what they are. We need to have a seachange in our thinking if we have any hope of reversing or declining economy. Deputy has put it simply, "people may complain about taxes but not as much as not having a job to begin with." the river rat (formerly known by a different name on the forum, but too many people too angry at me, so i'm starting anew)it | ||
Jsmyers Member Username: Jsmyers Post Number: 1424 Registered: 12-2003 Posted From: 209.131.7.68 |
I fail to see how a value added tax is especially regressive. You are not taxing food or healthcare. Somebody making $100,000/year is going to pay a lot more tax than somebody making $25,000/year. It is basically a tax on discretionary spending. The poorer you are the less descretionary spending you do. The value added tax on a Mercedes is a lot more than on a Pinto. The value added tax on a bacon cheesburger with fries is a lot less than the tax on a fillet migon. Is it not a tax that discourages spending (encourages saving)? Doesn't an income tax somewhat discourage earning (working/investing)? Now I agree with Lowell's post when it comes to the uncertain nature of Lessy's ideas. This is not a solid analysis. But in principle, I'm completely behind Lessy. I don't think we should be lower taxes in Michigan because we need to invest in education and transit infrastructure. But I think we should have a tax structure that is comparable to the other 49 states in the country. It seems to make sense to me that whenever possible, we should tax individuals (because that's who require services) instead of businesses (that can leave if they don't like the taxes). People can leave two, but how many people have you ever heard of moving to another state because the sales tax was too high? Now think of the companies that locate for tax reasons. This is especially important of issue when one of the state's (and especially Detroit's) biggest issues is unemployment.
I'd like to hear about these places to cut. Tell me what you want to cut. | ||
Spartacus Member Username: Spartacus Post Number: 86 Registered: 07-2005 Posted From: 209.114.251.65 |
Believe me, you don't want me to get into that on this thread. It'll hijack the thread and a bunch of people will get pissed at me. | ||
Livernoisyard Member Username: Livernoisyard Post Number: 95 Registered: 10-2004 Posted From: 69.242.223.42 |
Socialist-speak red-alert warning: Whenever a socialist, radiclib, the "L" word, progressive, [insert another synonym ] utters the word "invest," be advised that it is a euphonism for "tax-and-spend." They also often state that spending taxpayers' funds diverted toward their adult friends is done "for the children." | ||
Jsmyers Member Username: Jsmyers Post Number: 1425 Registered: 12-2003 Posted From: 209.131.7.68 |
Then start another thread, maybe in non-Detroit issues. I see your point now livernoisyard. How stupid of all of us to want roads, schools, transit, police & fire protection, or sanitation. We should start dismantling the public sector right now. Anything that can't make a profit isn't worth having. | ||
3rdworldcity Member Username: 3rdworldcity Post Number: 209 Registered: 01-2005 Posted From: 69.214.190.1 |
Spartacus-Deputy-River_rat: WELL SAID. Sorry, Lowell. | ||
Drm Member Username: Drm Post Number: 859 Registered: 10-2003 Posted From: 68.255.233.135 |
Is there any evidence that a business will lower its prices solely because its taxes decrease? I didn't think so. Anyway, the SBT may be bad for some of the reasons stated above, and others not mentioned, however I fail to see how it takes courage or vision to call for eliminating a source of revenue without a plan to replace it, either with additional revenue or by cutting spending -- and a blanket statement of "cut spending" doesn't count. Lest we forget, unlike the federal government, the State of Michigan is not allowed to fund its operations via debt. One other note: law firms can and do move work to lower-priced jurisdictions. There are a growing number of companies in India that perform outsourced work from law firms in the U.S. (side note - partially due to below-average salaries for attorneys in Michigan, we actually do import some legal work from other states). There's not much that can't be outsourced to cheaper labor markets nowadays. Much IT work has already moved (and, for that work that can't move, companies often import cheap help from overseas) and I imagine that accountants and other information workers will soon be facing the same issues, if they're not already. | ||
Skulker Member Username: Skulker Post Number: 3564 Registered: 10-2003 Posted From: 68.42.168.34 |
The SBT is a clumsy and poorly constructed tax system that needs reform and overhaul to be more efficient and effective. That said, it doesn't mean that taxes are a bad thing and for the sky is falling ninnies who think MI is in the mess it is in because of tax burdens, they are clearly barking up the wrong tree. MI is middle of the pack, 25th in total tax burden out of 50 states. Some other states with much higher tax burdens include some of the most economically successful states. Some very very low tax burden states include state like Mississippi, where poverty reigns as king. Time and time again, across the board tax cuts have been shown to result in new Cadillacs for business owners and not new jobs. High tax burden coupled with high service delivery that enchances the competitive nature of your comapny is not always bad. A high tax burden in very often more than offset by a well educated work force that is competitive. Granholm has been right all along. Lets replace the SBT but not until we have a fair replacement system ready to go. What we need is a replacement of the current loony tax system, not wholesale elimination of revenue streams. That shorts us on the things we need to be comeptitve, IE a well educated work force, quality infrastructure and a quality of life that attracts the brightest and the best rather than sending them scurrying to high tax burden places like NYC, Chicago, Boston etc. | ||
Livernoisyard Member Username: Livernoisyard Post Number: 96 Registered: 10-2004 Posted From: 69.242.223.42 |
The prices of Michigan products will be about the same as those in other states. So, the profit margin will be less. If the prices are raised to earn more, products from others, especially those nearby, will siphon off business. In any event, Michigan's taxed firms will have economic disadvantages. This is no-brainer 101. Anybody with half a brain knows that the already high level of "services" is not really etched in stone. How will paying teachers more increase the education of students? It will instead entrench the incompetent teachers among them even more so. Where else could they go and still get overpaid with their marginal talents, at best? Detroit is already paying some three times per student than it did back in 1960 in constant dollars. Hell, back then, DPS graduated the vast majority of its students instead of the 30-40% of them currently. Instead of building cheap freeways with planned obsolesence in mind - keeping the sand and gravel and construction special-interest groups happy - why not build them as they do in Europe? Nah! Can't do that. That's like building light bulbs that won't burn out. It's not good for the bulb makers after there are already enough bulbs in circulation. Likewise, for the other expenditures. The governor and KK will not reduce the city's payroll appreciably, at least not until their constituencies that bankrolled them are taken care of first. (Message edited by livernoisyard on February 17, 2006) | ||
Jiminnm Member Username: Jiminnm Post Number: 301 Registered: 02-2005 Posted From: 69.241.164.222 |
Drm, the reason that you have difficulty finding companies that lowered prices due to lower taxes is because the tax rates on corporations have steadily increased and have seldom been reduced. The irony of this, of course, has been pointed out above. There are no taxes on corporations, there are only taxes on consumers. Any taxes paid by corporations are simply passed through to whomever buys that corporation's product, and eventually to the consumer. The SBT is especially bad because the corporation is taxed for growing, whether its income is increasing or not. Unfortunately, corporations make a lot of decisions based on their tax impacts. In this rare instance, however, I will agree with one of Lowell's points. A sales tax is considered by some to be regressive (as compared to 'progressive' income tax) because those with lower incomes tend to spend a great percentage of their incomes than those with higher incomes. As a result, they spend a higher percentage of their income on sales tax than those with higher income. Whether or not it is truly regressive depends on your view of whether a so-called progressive tax (those that make more pay a higher percentage of taxes) is fairer than a tax system where everyone pays the same percentage. Some who advocate a uniform percantage would give a tax credit for sales or consumption tax paid (see www.fairtax.org). | ||
Lowell Board Administrator Username: Lowell Post Number: 2287 Registered: 10-2003 Posted From: 66.167.211.50 |
First off, I said nothing for or against the removal of the SBT. In fact, I would love to see it gone. I would love to see all taxes gone. My argument is against the alternatives being offered [or, more often, not offered] by the mice who figuratively want to bell the cat but the all run away when it comes to talk of governing with no money. I am clearly against covering the gap created by ending the SBT via a regressive sales tax on the services industry and the consumers who use them. This is merely changing seats on the Titanic while passing out life boats to the non service industries and their wealthy owners. Removing the SBT is based on a theory that this will trickle down with more hiring, but hiring is far more related to demand for a company’s product and a need to increase production. There are no guarantees that ending the SBT will lead to more hiring. One thing is certain, however. If the SBT was dropped tomorrow that money would go straight in the pockets of the owners without a soul being hired. Maybe later this would have some influence, but it's all probably maybe talk. By the Lessenberry supported LBP plan, that handout would disproportionately shifted to and paid for by small service businesses and their customers -- the little people. Dad and mom are laid off but they still have to pay tax on their kid’s haircuts. I have disagreements with Granholm, but I agree with her approach of not consenting to any cuts until the issue of funding them is resolved. Thus this issue is about raising taxes and who will pay those taxes. For Lessenberry to use word like gutless in the same paragraph with this thinly veiled misogyny [Gov. Jennifer "Aren't I Cute" Granholm] says more about him and than any lack of action or plan on her part. I believe that taxation should be based on the ability to pay which means a graduated income tax. We don't have even that in Michigan, so perhaps it is time to think about that as our way to cover the handing out of any SBT windfall. Maybe another approach is to get rid of the corporate welfare programs like MEGA. Another could be to change the SBT to a BT based on earnings. Personally I think any attempt to end the SBT ala Lessenberry/ LBP will get killed by the public when they find out who is going to pay [them] to make up the difference and who gets the benefit of their tax hike. So let's have a discussion about how ~you~ would raise taxes to cover this huge hole in the budget, a budget already slashed to the bone by billions. Let’s hear how you are going to sell your tax hike to the citizens of Michigan and explain why, de facto, giving that money to wealthy corporations and the their owners with no guarantees is good. I am totally familiar with all the trickle-down 'free' market sermons, so no need to parrot those. Get out there and hang the bell that cat for me and tell me why you won’t get your nose raked. | ||
Futurecity Member Username: Futurecity Post Number: 221 Registered: 05-2005 Posted From: 69.215.246.45 |
The Michigan SBT needs to be eliminated - with no replacement tax. It's time for Michigan to get real and to get competitive. If the tax constitutes 8% of State revenue (as someone mentioned above), then cut State spending by 8%. Start by cutting the armies of bureaucrats perched around the state and keep cutting until the 8% target is reached. Michigan will be better for it. | ||
Futurecity Member Username: Futurecity Post Number: 222 Registered: 05-2005 Posted From: 69.215.246.45 |
Lowell - as a small business owner I can tell you that writing our SBT tax check to the State every quarter has real, damaging effects on my business. It is a heinous tax that has not only stopped us from growing, but pushes us to the edge. And your comment about "giving that money to wealthy corporations and the their owners" is unbelievable. I can't imagine that you fully understand that comment. I believe that the vast majority of "wealthy corporations" are hardly that, but rather hard-working small business owners (more like slaves to a company who have paid in years and years of sweat and blood) who are extremely burdend by this tax. When I look at the amount of SBT tax that we are required to pay by the State vs our total revenue, it is an effin sin. I have no data on this, but I can't imagine that companies like Meijer, GM, Ford, ect, ect, pay anywhere near this percentage. If they did, they would have vacated Michigan long ago. The only common-sense answer is that this tax needs to go. It would be the best thing for Michigan. Unfortunately, in the end though, I believe it will stay. Because Grandstand will do what she does best - grandstand. She will whip the voters into a frenzy and the only people who will vote to end it will be small business owners like myself. Michigan will continue to be anti-small business. Job creation will continue to be a thing of the past. And Michigan will continue on its quarter-century economic quest to be 50th out of 50. | ||
Lowell Board Administrator Username: Lowell Post Number: 2289 Registered: 10-2003 Posted From: 66.167.211.50 |
Once again, I am not standing behind the flawed SBT; I am commenting on a viewpoint that would replace it with a regressive sales tax on other small business people and citizens. I am a small business person too but unfortunately my revenues are not enough to pay the SBT. Still, cutting in the SBT will hugely benefit large corporations far more than small fry like you and I. As to my point above, are you going to tell us you would run out hire someone if the tax was dropped tomorrow? I am willing to bet it just go in your pocket for starters. That's where it would go if I were in that situation. However, my business is such that a tax on services would impact me. My business is such too, that I don't have to do it in Michigan. I wouldn't leave but others in my industry could easily shove off. Meanwhile, unless replaced by another revenue source, the impact of ending SBT would be very devastating to the state. To deny that is to not "get real". | ||
Futurecity Member Username: Futurecity Post Number: 224 Registered: 05-2005 Posted From: 69.215.246.45 |
It seems that what you are saying is that as a small business owner you are not qualified to make an informed comment on the SBT, since the tax does not apply to you. Let others pay and everything will be okay. As to "running out and hiring some one if the tax was dropped tomorrow" - the answer is absolutely and positively yes. And it's hogwash (or just spin for those feeding off state governemt largess) to think that the ending of the SBT "would be devastating to the state". The state needs to right-size itself. Just as I and many many businesses have had to right-size. It's time to end the state's anti-small business policies that drive economic initiative into the ground. | ||
River_rat Member Username: River_rat Post Number: 9 Registered: 02-2006 Posted From: 71.126.175.134 |
Speaking again as an economist, it is almost universally agreed that the highest level of inefficiency in provision of goods and services is in government. Independent businesses MUST be profitable or they cease to exist; governments simply raise taxes to cover any incresed expense. The citizenry has no alternative to but to pay. Encouraging businesses by lowering their tax burdens, we would encourage the efficient creation of meaningful jobs. Futurecity understands when he states, "And it's hogwash (or just spin for those feeding off state governemt largess) to think that the ending of the SBT "would be devastating to the state". The state needs to right-size itself. Just as I and many many businesses have had to right-size." But then, who do we have to blame for the bloated and inefficient government? If we love our state government the way it is and the taxes we have, we should continue to ignore Lessenbury/LBP. the river rat | ||
Lowell Board Administrator Username: Lowell Post Number: 2290 Registered: 10-2003 Posted From: 66.167.211.50 |
"...as a small business owner you are not qualified to make an informed comment on the SBT, since the tax does not apply to you". So, if a policy is proposed to essentially shift a tax burden from your business to mine and others I am not qualified to comment?? What kind of reasoning is that? BTW, I send in quarterly payments too and am getting hammered every month by health insurance payments as I am sure you are too. As for those who are "feeding off state government largess" read my comments above about ending MEGA grants. What is your opinion of those? Does your business benefit from them? I would be happy to end / reform SBT in exchange for that. I am in favor of fixing the SBT issue, but I do not support simply ending it or shifting to others. How do you propose to "right size" state government to cover the huge gap that ending SBT with no replacement revenue would create? Close down all state parks? End all road repair? Close down a few state universities? It is easy to toss out slogans like 'right-sizing', just as it is easy for mice to propose belling a cat. Just try and do it. As Skulker points out above, Michigan is right in the middle as far as tax burdens go. If your business is not faring well perhaps you should examine your business plan and products rather than looking to shift a tax burden onto other businesses or the state budget. | ||
Mcp001 Member Username: Mcp001 Post Number: 2025 Registered: 11-2003 Posted From: 69.14.135.95 |
Given Michigan's lackluster economy, I'm all in favor of dumping the SBT. Michigan is the only state that has it, and gasp, were the last in the pack when it comes to economic growth (hey, deroche: you can save us $100k...your study results are right here!). As for the insane idea of replacing it with "something", including an expanded sales tax, I ask this: Why? Anyone who has looked at Michigan's budget can find a ton of programs and projects that have no basis in our state's constitution! Before people start bellyaching about whether or not their "sacred" program will fall, you can save yourself by making a quick trip over to www.michigan.gov, and pulling up a copy of the Michigan Constitution. Yes, this is the same document that our elected officials have sworn to defend and uphold when taking office. Every program and office should be subject to a test to see whether or not it conforms with the powers and duties enumerated in the Michigan Constitution. Nothing enumerated, no funding. You'd be surprised to see how many items that were currently paying for have NO mention at all. You may even be able to slash taxes that residents pay as a whole, thereby making life a little easier for all of us. BTW, interesting topic, but why isn't this in the Non-Detroit Issue thread? | ||
Irish_mafia Member Username: Irish_mafia Post Number: 340 Registered: 10-2003 Posted From: 69.221.79.80 |
Let's put one argument to bed: Getting rid of the SBT does not eliminate that much revenue from state coffers. That line of thinking is based on a static revenue model that has been repeatedly disproved. Indeed, the opposite effect has been proven over and over again: If you leave the tax in place, you lose more businesses and their associated revenues as they move to a more friendly tax climate...like 100 miles south to Ohio. If you eliminate the tax, you have just created the incentive for businesses to invest here. They make the investment here, and hire people, and add revenues that we would not have seen because they now see a business tax model that is attractive to them...Michigan's revenue increases! The static business model continues to get press from under educated reporters that either don't undertand economics or don't want to address the fact that their "us vs. them" politics of class envy have no basis in fact. Thus when Granholm says that she won't eliminate the SBT without replacing it with another tax equally as stifling to our economy, she is not challenged by a press that doesn't understand the difference between taxes and revenue. Eliminate the SBT. Attract new business and the increased revenue that comes with it, reduce the carnage of moving trucks headed south and do it now! By the way...LBP sits at the right hand of God. | ||
Pjazz Member Username: Pjazz Post Number: 20 Registered: 04-2005 Posted From: 69.212.63.169 |
When we last supposedly cut property taxes and increased the sales tax wasn't there an unknown increase written in on property tax once the propety changed owners? The only break this proposal will give is to businesses and you better beleive the regular working person/home owner is the one who will get the shaft. | ||
Skulker Member Username: Skulker Post Number: 3565 Registered: 10-2003 Posted From: 64.148.227.247 |
All these statements are the mantra and bible of those that think taxes completely strangle and smother economic growth and there simple removal will bring showerings of plenty. Wrong, wrong, wrong.....Microsoft doesn't offshore programming to India because taxes are cheaper, they offshore because wages are a fraction of those here. WTF???? If we are 25th in business tax burden should be 25th in growth, not last. CLEARLY there is more to the story that just tax burden. We did this already... Engler slashed and burned taxes and spending with no apprecieable effect. If those polcies were so effective at creating jobs and a robust economic base, where is it? Where are the jobs and diversified economy promised to us by Engler and others? WHERE THE HELL IS IT??????? No where, but a lot of DeVos' and Nicholsons have nice shiny new homes and fatter bank accounts. Unfortunately, the gutting of services will come home to roost soon. Detroit is already struggling with a homless population that is a direct result of Engler mental health hospital closures. At the end of the day, business is business. There are some servies a business simply will not provide for mankind because there is simply no way to make money in it. I.E. firefighting, enviromental moitnoring and policy making, drug counseling for children of the homeless. To then turn around and assail givernment for being inefficient for doing the dirty work business can't make money is juvenile at best. Are there times gov't could be more efficient? Absolutely, but I wonder how many small business owners would have the balls and backbone to keep their businesses running if governmental functions were to be severely curtailed. For example: Who would investigate the mercury dumped in the alley behind your business that contaminated the ingredients delivered through the alley for your bakery? EPA? Nope, not a government funtion, cuz we cut taxes and got rid of unneccessary crap like that. Go hire a private investigator and sue the jerk that dumped it. What? Can't afford one? Too bad. Thats the "efficiency" of the market. Figure out how you are going to deal with the problem....guess the weak lose and strong survive. What? A child died because it ate food tainted with mercury? Sorry, we eliminated the food safety programs, you know, had to cut taxes and expenses. Oh well, strong survive, the weak die. Get out of the paradigm and think a little. | ||
Irish_mafia Member Username: Irish_mafia Post Number: 342 Registered: 10-2003 Posted From: 69.221.79.80 |
Skulker, You are rambling and all over the map. Lower taxes increase revenues. Its proven. If you want to talk about cleaning up allies that's nice... do it with the increased revenues that you would gain by reducing taxes, starting with the elimination of the SBT. Get out of the paradigm that increased taxes will help you...they don't...increased revenue might....understand the difference | ||
Irish_mafia Member Username: Irish_mafia Post Number: 343 Registered: 10-2003 Posted From: 69.221.79.80 |
A lttle more education: "The latest chapter of this story is the 2003 income and investment tax cuts enacted by the current President Bush. As in 1981, opponents insisted those tax cuts would harm the economy by increasing the deficit and driving up interest rates. But in the two and a half years since those tax cuts passed, the economy and tax revenues have both surged." From the attached article: http://www.opinionjournal.com/ editorial/feature.html?id=1100 07843 Read and learn | ||
Drm Member Username: Drm Post Number: 862 Registered: 10-2003 Posted From: 68.252.124.153 |
Education? From an editorial on a website called opinionjournal? | ||
Irish_mafia Member Username: Irish_mafia Post Number: 345 Registered: 10-2003 Posted From: 69.221.79.80 |
Yes. Perhaps you would prefer the education of some left wing blog that thinks if you increase taxes, you increase revenues? I'll take my information from the Journal any day. | ||
River_rat Member Username: River_rat Post Number: 16 Registered: 02-2006 Posted From: 207.67.146.177 |
Skulker, reducing taxes in Michigan is only one of the mechanisms necessary to rebuild our economy and stimulate job growth. It would require several dozen pages to even begin to outline the problems that plague the economy of Detroit and Michigan. These problems have been visited and revisited by economists repeatedly (tautolic and redundant). Our politicians, union leaders, (and yes) business leaders do not possess the fortitude to articulate the painful steps necessary to make our area great again. It would cost them all their personal comforts because they would lose support. Instead, our economy loses jobs. We need more pain to make us look to the difficult solutions that lie ahead. the river rat the economist | ||
Irish_mafia Member Username: Irish_mafia Post Number: 346 Registered: 10-2003 Posted From: 69.221.79.80 |
Some raw numbers to chew on: http://www.cato.org/pub_displa y.php?pub_id=1120 | ||
Drm Member Username: Drm Post Number: 863 Registered: 10-2003 Posted From: 68.252.124.153 |
We really do have a problem with the definition of "education" don't we? | ||
Irish_mafia Member Username: Irish_mafia Post Number: 347 Registered: 10-2003 Posted From: 69.221.79.80 |
Using the papal "we" drm? I didn't even know you were Catholic. The dfinition of Education: ed·u·ca·tion ( P ) Pronunciation Key (j-kshn) n. The act or process of educating or being educated. The knowledge or skill obtained or developed by a learning process. A program of instruction of a specified kind or level: driver education; a college education. The field of study that is concerned with the pedagogy of teaching and learning. An instructive or enlightening experience: Her work in the inner city was a real education. No problem for those of us that deal with facts and reality. Is there a different definition in your world? | ||
Drm Member Username: Drm Post Number: 864 Registered: 10-2003 Posted From: 68.252.124.153 |
You know how to use the dictionary. I am so proud of you. Next, let's explain the difference between "education" and "indoctrination" as well as the differences between "fact" and "opinion" and "reality" versus "fantasy". For extra credit, try putting the concepts to practical use in this thread. | ||
Irish_mafia Member Username: Irish_mafia Post Number: 348 Registered: 10-2003 Posted From: 69.221.79.80 |
Interesting way of avoiding addressing the issue by muttering inane "nothings." Drm. Instead of babbling like an idiot, why don't you try to back up what appears to be your pro-tax message with something concrete. Like numbers? Then, after we smother your rationale, or lack of it, we can discuss such metaphysical concepts as "why is there air?" | ||
River_rat Member Username: River_rat Post Number: 18 Registered: 02-2006 Posted From: 207.67.146.177 |
Comment- The intelligent have a right over the ignorant; namely, that of instructing them. The preponderance of evidence supports the claim that reduction of taxes stimulates economic growth in our current economic model of capitalism. the river rat the economist | ||
Lowell Board Administrator Username: Lowell Post Number: 2293 Registered: 10-2003 Posted From: 66.167.211.61 |
"Getting rid of the SBT does not eliminate that much revenue from state coffers." According to Lesenberry that is $1.8 billion. You make statements like that, then pretend to ed·u·cate this forum and expect anyone to take you seriously? If you wish to tout the Reagan and Bush 2 tax cut models, then you have to factor in the growth [yes growth] of government that came with their tax cuts which were both funded by piling up record deficits. That little trick of dumping phony money into the economy won't work in Michigan because we have a balance budget amendment. So let's get back on the topic dumping / amending the SBT and explaining to the forum you are going to fill that hole in the budget, not how it might be filled after things trickle down according to your theories. | ||
River_rat Member Username: River_rat Post Number: 20 Registered: 02-2006 Posted From: 207.67.146.177 |
Our Federal and State tax systems and mechanisms are out-of-control. There are some radical but interesting proposals out there to remedy this. Readers may want to look at www.fairtax.org backed by Neal Boortz for ideas. This is essential a VAT (Value Added Tax) system that taxes both goods and services. Protections for the lowest income levels have been built in and this tax certainly taxes those who spend the most. Usually those who spend the most make the most. Look at it this way. A Saturn vehicle may cost $15,000 and a Mercedes R class $60,000. With a VAT of 15% the Saturn buyer pays $2,250 in taxes; the rich Mercedes buyer pays $9000! Not regressive in any way. The system can be made revenue neutral and can work for both Federal and State taxes. The real problem is not the tax rate, it is managing a way to cap governmental spending. This is far more problematic wih the Feds. They print the money and have no balanced budget sympathies at all. How can you run an war, buy Louisiana, and keep the pork barrels on trains heading back to home? The State of Michigan has a balanced budget amendment and can not exceed income; but, the legislature will simply increase revenues UNLESS the electorate removes those who do not commit to reducing expenditures and follow through. Yet every year, the same free spending (with your money) guys are re-elected. Your choice. river rat the economist | ||
Irish_mafia Member Username: Irish_mafia Post Number: 349 Registered: 10-2003 Posted From: 69.221.79.80 |
Thanks for your input River Rat. Lowell, your bizarre and interesting assertion that the growth of the economy was fueled by deficit government spending vs. the noted increase in tax revenues from private citizens and corporations due to the reduced tax rate during those growth periods indicates a bias but doesn't really have any basis of fact to back it up. So, to the topic of dumping the SBT, the budget is false as it is based on present revenues from the sbt...revenues which will go down as businesses continue to leave the state. This "hole" in the budget is created by folks like yourself who follow a static tax model and do not understand how businesses and individuals react to tax code nor do they properly account for this taxpayer reaction. The solution to filling this hole as well as increasing tax revenues is to eliminate the SBT and bring in businesses that will not presently locate here (lost opportunity cost that we now face)which will increase corporate and individual tax revenues for the state. Or...you could ignore historical facts and pretend that increasing taxes in another area will actually increase revenue more than it will disuade businesses and individuals from locating here. This is a failed theory and will continue to cost the state businesses, jobs and revenue. | ||
Drm Member Username: Drm Post Number: 865 Registered: 10-2003 Posted From: 68.252.124.153 |
Instead of calling people names, why don't you try to back up what appears to be your anti-tax message with something objective that isn't merely trying to push a pro-business agenda? | ||
Irish_mafia Member Username: Irish_mafia Post Number: 351 Registered: 10-2003 Posted From: 69.221.79.80 |
I gave you revenue numbers from the CATO Institute that show that revenue increased dramatically when the tax rates were lowered. If you have something that contradicts that, lay it on the table. You haven't provided anything objective and I understand that. There is nothing for you to provide beyond rhetoric. As my gym teacher used to say before applying a tally wacker, "Education can be painful!" | ||
Jsmyers Member Username: Jsmyers Post Number: 1432 Registered: 12-2003 Posted From: 141.211.31.42 |
Lets try to find some common ground: IF it is true that reducing a tax rate increases revenue, there are a number of caveats: 1) It doesn't happen overnight. 2) Deficit spending has allowed this situation for the federal government in the past. (The state can't do this.) So for this to work in Michigan, a few things need to happen: 1) The reduced revenues must not reduce or eliminate the states ability to support business activity (for example education). 2) The state must possibly steal tax revenues from another state. (What some would call a race to the bottom.) | ||
River_rat Member Username: River_rat Post Number: 21 Registered: 02-2006 Posted From: 207.67.146.177 |
Well said, Irish mafia. Someone obviously didn't read your Cato Institute reference post before inserting their foot. "It is not necessary to understand things in order to argue about them." -Pierre de Beaumarchais 1732-1799 "The more things change, the more they stay the same" the river rat the economist | ||
Lowell Board Administrator Username: Lowell Post Number: 2295 Registered: 10-2003 Posted From: 66.167.211.61 |
Bizarre? Are you saying that borrowing and spending trillions of deficit dollars had no effect on the ecomony? Sorry can't do that in Michigan. It is pay as you go. "The solution to filling this hole as well as increasing tax revenues is to eliminate the SBT and bring in businesses that will not presently locate here". So name those businesses. You have it backwards. This a pay as you go state, fill the hole then take the tax cut. No dessert until we eat our vegetables. Build it and they will come won't fly in this economy. | ||
Irish_mafia Member Username: Irish_mafia Post Number: 352 Registered: 10-2003 Posted From: 69.221.79.80 |
Lowell, You have it wrong. "Tax them and they will pay" will not work in this economy. They won't pay and they won't stay. That model is not paying for itself, that is one of the reasons that we are in the mess we are in. You "pay" by increasing revenues. The proven way to increase revenues is to reduce the tax burden on the businesses that you want to attract allowing them to increase investment in your state and the subsequent tax revenues that accompany that investment. Not by pretending that another tax increase won't drive away more business. That is a self-lie that will continue to ruin this state. You say "Name those businesses". Without laying myself out for everyone, I will tell you that my company was looking at putting in a midwest plant a year and half ago. The number one restriction was "It won't go into Michigan." I have heard that from company after company. Listen to LBP's call for the elimination of the SBT, he had Michiganders call him and say they finally had to move out because of the anti-business taxation of this state. Name the businesses? Name the businesses that will stay except for city employees and photographers that put their love of the city potentially ahead of their own business needs. You get around this city all the time Lowell. Talk to some of the business leaders that you encounter (private industry). Companies that have multiple opportunities for investment will put their money where it will have the best chance of success. Right now, Michigan's tax system makes it a big loser! "Pay as you go" will be a lot less painful if we start using realistic projections for revenues with tax policies that encourage business instead of following the failed static model that you seem enamoured with. | ||
River_rat Member Username: River_rat Post Number: 22 Registered: 02-2006 Posted From: 207.67.146.177 |
I just changed my user name on the forum because of all the people I have offended with my ideas and proposals. And now I’m afraid I am going to do it again. As an economist and manager of a hedge fund, I look for businesses that will profit and those that will fail. Hedge funds can sell short and profit from those companies who fail. Most investors with IRA’s and 401k’s are not permitted to do that. Most Americans don’t like this because investing for failure means you profit from others failures. Looking for reasons why companies will fail is even easier than trying to identify those that will be successful. Who runs them, where are they located, what is their tax and labor situation? These and other factors can be used to find the companies doomed to fail. Fertile ground for finding companies in trouble is my beloved home state and city of Michigan and Detroit. Businesses are overtaxed, over regulated, over-unionized, and when the management failed to recognize this and didn’t change venue and policy to avoid these factors, the perfect storm for business failure exists. Think Delphi. Michigan remains a fertile ground to hunt for the future business failures. Think Ford and GM. I do not want it this way, I want Michigan and Detroit to return to former successes. Before any new businesses can come to Michigan, something has to be done about reducing the business tax burden. Not the only thing, mind you, but one of the factors. I doubt it will happen and I’ll just keep looking for future failures. the river rat the economist | ||
Lowell Board Administrator Username: Lowell Post Number: 2297 Registered: 10-2003 Posted From: 66.167.211.61 |
"Before any new businesses can come to Michigan, something has to be done about reducing the business tax burden." Before any? Are you serious? I think we all want well for Michigan but have disagreements on how to accomplish this. Businesses more likely not will want to move to a state that has broken roads, inadequate fire protection, closed museums, neglected universities and schools with undereducated unhealty labor force and urban streets haunted by the homeless. This is Michigan today. Passing out nearly two billion a year with no compensation or guarantees will not help this sad state of affairs. You don't have to be an economist to understand that the bucket is dry. This is a pay as you go state by constitution. Pay up, and not with hopes and wishes, and you can collect your tax cut. | ||
Irish_mafia Member Username: Irish_mafia Post Number: 353 Registered: 10-2003 Posted From: 69.221.79.80 |
"You don't have to be an economist to understand that the bucket is dry. This is a pay as you go state by constitution. Pay up, and not with hopes and wishes, and you can collect your tax cut." ______________________________ ________________ Wake up dude, The guys who are paying the taxes aren't the one's looking to "collect their tax cut". They are the ones who create the world that you have the privlidge of existing in. They are the ones who we want to attract to build business and create jobs in this city and state. A couple quick facts: The Top 50% pay 96.54% of All Income Taxes (The top 1% pay more than a third: 34.27%) October 4, 2005 This is the latest data for calendar year 2003 just released in October 2005 by the Internal Revenue Service. The share of total income taxes paid by the top 1% of wage earners rose to 34.27% from 33.71% in 2002. Their income share (not just wages) rose from 16.12% to 16.77%. However, their average tax rate actually dropped from 27.25% down to 24.31% *Data covers calendar year 2003, not fiscal year 2003 - and includes all income, not just wages, excluding Social Security Think of it this way: less than 3-1/2 dollars out of every $100 paid in income taxes in the United States is paid by someone in the bottom 50% of wage earners. Are the top half millionaires? Noooo, more like "thousandaires." The top 50% were those individuals or couples filing jointly who earned $29,019 and up in 2003. (The top 1% earned $295,495-plus.) Americans who want to are continuing to improve their lives, and those who don't want to, aren't. Here are the wage earners in each category and the percentages they pay: The top 1% pay over a third, 34.27% of all income taxes. (Up from 2003: 33.71%) The top 5% pay 54.36% of all income taxes (Up from 2002: 53.80%). The top 10% pay 65.84% (Up from 2002: 65.73%). The top 25% pay 83.88% (Down from 2002: 83.90%). The top 50% pay 96.54% (Up from 2002: 96.50%). The bottom 50%? They pay a paltry 3.46% of all income taxes (Down from 2002: 3.50%). The top 1% is paying nearly ten times the federal income taxes than the bottom 50%! And who earns what? The top 1% earns 16.77% of all income (2002: 16.12%). The top 5% earns 31.18% of all the income (2002: 30.55%). The top 10% earns 42.36% of all the income (2002: 41.77%); the top 25% earns 64.86% of all the income (2002: 64.37%) , and the top 50% earns 86.01% (2002: 85.77%) of all the income. So Lowell, when you say pay up, I think you need to be the first one at the bank... In the interim, instead of playing the inept game of class warfare that you are laying out, I suggest that you learn about economics, how they affect behavior, how the basic tax policies that have made every state in this nation more profitable by their tax policies than Michigan might be helpful. We have an opportunity to attract business and revenue or follow the ill-advised path of over taxation that you prescribe. One is a proven winner. One is a proven loser. | ||
Drm Member Username: Drm Post Number: 866 Registered: 10-2003 Posted From: 207.215.1.194 |
Why is it so hard for you to understand that this is not an objective source? | ||
Irish_mafia Member Username: Irish_mafia Post Number: 354 Registered: 10-2003 Posted From: 69.221.79.80 |
DRM. Boy you have such a way with those one sentence zingers Were you able to actually get through school with that kind of hard logic and sourcing? I can certainly see with your thoughtful analysis that your the kind of person that we need in Lansing to get this situation resolved. You don't like the Journal. You don't like the CATO Institute. The last information that I used was from the IRS. Given your tax stance, you would think that you would love them.... but apparently not if their information gets you away from your pro-tax mantra. This is going to be hard, I know. But dig deep... and try,... try really hard to make a relevant statement with something to back it up...or perhaps you woould like to share your deep insights on a thread that you can actually contribute to? | ||
River_rat Member Username: River_rat Post Number: 24 Registered: 02-2006 Posted From: 71.126.175.134 |
Irish mafia - Please stop confusing people with facts. It much easier for them to live in fantasy. the river rat | ||
Lowell Board Administrator Username: Lowell Post Number: 2298 Registered: 10-2003 Posted From: 66.167.211.61 |
"...includes all income, not just wages, excluding Social Security" Typical Cato Institute slant, scoff at the Social Security tax while shedding crocodile tears for the poor oppressed super wealthy who have been the beneficiaries of the Bush 2 and Reagan tax cuts. Ignore a 15.3% flat tax that falls on all income up to $94,200 - split if paid by employer but fully paid if you are you own employer as I am. Anyone fortunate enough to reach that plateau is rewarded with a 15.3% tax cut. If your income is 10 million that is a de facto tax cut of $1.5 Million. A poverty wage worker at Walmart and the middle class workers never escape this tax. This is why Cato Institute holds so little credibility. It is the Rush Limbaugh of think tanks-- totally predictable, full of gas. But this is all federal policy and this thread is about finding solutions for eliminating / amending the Michigan SBT. For those who support eliminating it, I want to hear their proposals as to what taxes should be raised or what state services should be ended to cover a $1.8 billion year-after-year gap in the general fund. Why do you not want to /can’t answer that question? | ||
Drm Member Username: Drm Post Number: 867 Registered: 10-2003 Posted From: 207.215.1.194 |
Sorry, Irish_mafia, I have a problem with folks citing propaganda and calling it facts. But, if that's all you've got to back up your arguments, fine, then that reflects negatively on their credibility, and I will continue to dismiss them. Merely stating that, during a certain period, revenues increased when taxes were reduced doesn't prove that it happened because of the reduction. That is correlation and not causation. Furthermore, your IRS figures have nothing to do with this contention. It's also interesting how early on in the discussion you resorted to calling people ignorant and insulting them. Again, this reflects negatively on your ability to prove your position. River_rat, as an economist, perhaps you can tell us whether economists publish peer-reviewed studies on these matters as experts do in other fields. If so, perhaps you can point us in the direction of how to find them. That, to me, would be educating people. | ||
Irish_mafia Member Username: Irish_mafia Post Number: 355 Registered: 10-2003 Posted From: 69.221.79.80 |
You do have a problem. That's for sure DRM... still whining in the corner without anything to back up your statements ______________________________ ___________________ "I want to hear their proposals as to what taxes should be raised or what state services should be ended to cover a $1.8 billion year-after-year gap in the general fund." Lowell, If you want ot hear that proposal, invite DRM to a party and maybe he can give you one. You won't get that proposal from any serious minded person, because it's a losing proposition based on the repeated failed view of a static tax model. We have told you that the $1.8 billion (which is a false number because it wrongly assumes that you will continue to collect SBT from businesses that are leaving the state) will be paid for by new revenues of businesses attracted by friendly tax policies. It's not a secret that this works and its certainly not a model that you or DRM or any of your lefty buddies can effectively counter. Of course you are not listening and continue to stick to a static tax model that has been proven wrong. Now how do you propose to attract revenue with the failed tax model that you are using and what successful model are you sighting to accomplish it? Why can't you answer that? | ||
Jsmyers Member Username: Jsmyers Post Number: 1433 Registered: 12-2003 Posted From: 209.131.7.68 |
Irish, Why is it so hard for you to understand that the changes you write about take time?
You might be right in this statement, but these new businesses won't and can't move or expand overnight. If the SBT is eliminated effective Jan 1, 2007, the revenues will only be fully made up over a number of years. (Just as the erosion of projected revenues doesn't happen overnight.) So the question is, in the meantime, what do you cut, or how do you make up that revenue? | ||
Drm Member Username: Drm Post Number: 868 Registered: 10-2003 Posted From: 207.215.1.194 |
The claim that tax cuts pay for themselves by increasing tax revenue is misleading. The statements in this thread that this is an undisputed fact are wrong. Wall Street Journal recycles supply side nonsense also see, from the same author: http://www.brendan-nyhan.com/b log/2005/08/bush_suggests_t.ht ml David Stockman, quoted in http://en.wikipedia.org/wiki/L affer_curve:
From Arthur B. Laffer (http://www.heritage.org/Resear ch/Taxes/bg1765.cfm):
Bruce Bartlett http://www.nationalreview.com/ nrof_bartlett/bartlett20060215 0837.asp:
| ||
Jsmyers Member Username: Jsmyers Post Number: 1434 Registered: 12-2003 Posted From: 209.131.7.68 |
I disagree with Lowell that there is question about whether Michigan being the only state with an SBT is a good idea. I think we have to get rid of it. But I also believe that we have to make up the revenues so that the state's education system and infrastructure don't suffer any more. If the policy changes cause revenues to increase in the future, than we can talk about how to cut taxes in the future. We can't ignore our infrastructure in the meantime, and we can't let a generation of people go without an effective education, if we hope to be competitive in the future. The issue is not that Michigan has too high of taxes the issue is the way Michigan levies its taxes. (Michigan is middle of the road in tax burden.) | ||
Spartacus Member Username: Spartacus Post Number: 88 Registered: 07-2005 Posted From: 68.42.217.91 |
If the SBT were eliminated I think that it's fair to say the state would see collections increase in other areas. There is some merit to the supply side theories. The question is really how much would revenues increase as a result of the SBT elimination. The cause and effect is difficult to pin down. If it weren't you might get two economists to agree on something. Just because the federal gov't cuts taxes and then sees an increase in revenues the next year does not mean that the tax cut was solely responsible for this. If this were true let's look at the logical implications. If taxes in Michigan were completely eliminated save for a 1% income tax would anyone be willing to argue that tax revenues would be higher than they are today? If property taxes are increased in say Troy is anyone going to argue that Troy will take in less money next year? The SBT needs to be eliminated for many of the reasons recited above. The State will have to increase taxes to make up for the shortfall. Taxing services is a horrendous idea. The best thing to do would be to increase property taxes, say 10% and increase the state income tax by about 1%. That way the federal government ends up paying part of the tab. | ||
Lowell Board Administrator Username: Lowell Post Number: 2300 Registered: 10-2003 Posted From: 66.167.211.61 |
DRM, please stop citing facts, they are confusing Irish Mafia and the 'economist' formerly known as MrJoshua. Jsmeyers I have no idea where you got this from, "I disagree with Lowell that there is question about whether Michigan being the only state with an SBT is a good idea." I said nothing of the sort. Please read what I wrote before putting words in my mouth. The issue I am talking about is what will happen if the SBT is eliminated / reformed. My question remains. I want to hear their proposals [those who propose eliminating the SBT ] as to what taxes should be raised or what state services should be ended to cover a $1.8 billion year-after-year gap in the general fund. I do not want to hear regurgitated Cato dreams of what might happen in the future. The gap will have be paid now or the cuts made now, not when the tooth fairy arrives. [crickets] | ||
Irish_mafia Member Username: Irish_mafia Post Number: 356 Registered: 10-2003 Posted From: 69.221.79.80 |
Lowell, Sorry about the delay in response, I got confused with all of the facts that DRM was laying out. Clearly your contention is that eliminating the SBT will not keep businesses (and their tax revenues)in that the State that would otherwise leave and it will not attract businesses by the more attractive business investment climate it creates (and their associated tax revenues, direct and indirect). If I am putting words into your mouth as you accused JSMyers of doing, please feel free to correct me (I simply draw that conclusion because your view that $1.8 billion will remain exactly the same as a revenue gap). If we believe that this is true, then we should do absolutely nothing. Why waste the time effort and resources on an action that will have 0 impact on our state? Let's spend our time on activities that will have a positive impact on the State. Lowell perhaps you could help us with this. Spartacus, I agree with your analysis although I don't know if I agree with the solution. | ||
Skulker Member Username: Skulker Post Number: 3567 Registered: 10-2003 Posted From: 64.148.227.247 |
Then why, after massive tax cuts by Engler has the State economy not moved forward? Why after massive cuts by Engler are we saddled with massive deficits? Explain the massive deficits at the Federal level. Across the board tax cuts have NOT been proven to create that result you claim. DRMs excellent post shows that very very clearly. There are many many other variables that come into play. Simply cutting taxes more often endangers the programs that actually do lead to increased productivity and competitiveness such as a well educated work force and quality of life that attracts new investment, not just keeping aging industries from moving to low wage regions. | ||
Lowell Board Administrator Username: Lowell Post Number: 2301 Registered: 10-2003 Posted From: 66.167.211.61 |
Irish Mafia, I am not contending anything about what businesses might or might not do if the SBT were eliminated. That is my point. We can't know, only speculate. This I know. A huge funding gap will be created. This must either be made up with new taxes or cutting services. I am only asking that those who propose ending the SBT explain how this would be done. I have no problem seeing the SBT removed but simply dropping it without answering that question is not a responsible option. What do you think about ending MEGA and other corporate welfare like local community property tax breaks as a way to cover part of the gap? [...written as I watch news of the Detroit zoo closing.] | ||
Jsmyers Member Username: Jsmyers Post Number: 1436 Registered: 12-2003 Posted From: 209.131.7.68 |
I'm sorry Lowell. I took most of your post on this thread to mean you questioned the whole idea. (I didn't believe you flat-out opposed it.) On this:
I completely agree. I think we should use a combination of a fuel tax, corporate income tax, and some version of the value added scheme that Lessenberry writes about. It don't think there is a significant cut we can afford to make. Probably some small ones, but there are also some serious needs for increased funding now (including road repair (not expansion), transit, and education). Lowell, IF the SBT was eliminated, what would you want to do? | ||
Irish_mafia Member Username: Irish_mafia Post Number: 357 Registered: 10-2003 Posted From: 69.221.79.80 |
Why would you change the tax to something other than the SBT if it is revenue neutral? Why not just leave the sbt in place? | ||
Jsmyers Member Username: Jsmyers Post Number: 1437 Registered: 12-2003 Posted From: 209.131.7.68 |
Because the SBT can be eluded by locating a business elsewhere. Sales, property, or income taxes don't play as big of role in company's location or expansion decisions. | ||
Irish_mafia Member Username: Irish_mafia Post Number: 358 Registered: 10-2003 Posted From: 69.221.79.80 |
ahhh, I see. So you're not really concerned with attracting business to the State per say...more to the point, can we try to tax some of the folks that are slipping away undertaxed today? How do you think that shift will be perceived by companies deciding whether to locate in MI or whether to move out? | ||
Skulker Member Username: Skulker Post Number: 3570 Registered: 10-2003 Posted From: 68.42.168.34 |
And neither is the State Senate or House with their squashing of the Governors High Tech Investment bond issuance. You want reality and why job creators really leave the State of Michigan? Look no further than Mobius Microsystems. This company has the very real potential of reaching more than $500 million in sales and creating more than 350 high tech jobs with average salaries of over $125,000. They were here in Detroit and will move to California WHERE TAXES ARE HIGHER than Michigan solely because they cannot find sufficient venture capital here in MI and the work force they are trying to recruit is finicky about quality of life issues. In the mean time the Republican Congress kills a venture capital bond fund that would have moved MI from 25th to 25th in total tax burden ranking and is trying to cut more taxes with no replacement that will further negatively impact quality of life in Michigan. BTW, the SBT removal would leave us still at 25th in total tax burden. We have lower taxes and are losing a microchip design firm because of lack of decent venture capital and poor quality of life. In the mean time knuckleheads here are bitching about the SBT and concenred about losing a few warehousing jobs to Toledo. When oil prices don't drop, watch those warehousing jobs come back. | ||
Futurecity Member Username: Futurecity Post Number: 226 Registered: 05-2005 Posted From: 69.212.62.221 |
Skulker, I don't know where you're getting your numbers from, but accorting to http://www.taxfoundation.org/r esearch/topic/36.html, Michigan in 2003 had the 4th highest corporate tax burden in the country. And actually California had the 5th highest corporate tax burden in 2003, so maybe that was one more reason why Mobius is leaving. If Michigan was say, 20th or 30th in corporate tax burden, would they still be leaving? Perhaps. But maybe then we would only lose companies and jobs to other states for reasons beyond our control - like sunnier weather or proximity to investors, rather than for the sole reason of keeping the fat cats in Lansing, fat. (Message edited by Futurecity on February 20, 2006) | ||
Danny Member Username: Danny Post Number: 3729 Registered: 02-2004 Posted From: 141.217.174.235 |
YAY!!! Let's get rid of the small business tax. While mom and pop is losing money to the proposal. Other corporate retail chains with those shopping malls are whistling dixie. | ||
Skulker Member Username: Skulker Post Number: 3576 Registered: 10-2003 Posted From: 67.103.104.93 |
The tax burden I have cited is overall tax burden. The SBT is a corporate income tax that is exceptionally high. The other hidden taxes other states levy are not as onerous in Michigan, driving the overall tax burden down to about middle of the pack. A reform of the SBT is necessary, but a wholesale elimination based on incomplete data driving a philosophical agenda is a recipe for disaster. (Definition of "disaster": see Iraq and WMDs.) ANY reform of the SBT has to have a replacement component either througfh cutting expenditures or redistributing revenuie resources. That has been Granholms mantra and it has been mine all along here as well. | ||
Irish_mafia Member Username: Irish_mafia Post Number: 361 Registered: 10-2003 Posted From: 69.221.79.80 |
Why do it? It sounds like a waste of resources. What is the goal of switching one tax for another? JSMyers said his goal in changing this was "Because the SBT can be eluded by locating a business elsewhere. Sales, property, or income taxes don't play as big of role in company's location or expansion decisions". I can't tell what you're trying to do with this philosphical approach to taxation. You can't be trying to increase the businesses and the associated revenues in the area, because you aren't attempting to account for them. Indeed, by adding new taxes based on the failed model of static taxation, it ppears to be a recipe for disastor, (Definition of "disaster": see Democratic attempts to win a position of relevance in our govt.) | ||
Fnemecek Member Username: Fnemecek Post Number: 1518 Registered: 12-2004 Posted From: 70.230.13.21 |
It's not just the rates that are high, but they way in which it is calculated. It's basically done the exact opposite way as every other state in the union. This is why I've argued that we should replace the current SBT with a traditional corporate income tax, with a rate that's on par with neighboring states. | ||
Lowell Board Administrator Username: Lowell Post Number: 2302 Registered: 10-2003 Posted From: 66.167.211.61 |
Finally some air. Good suggestion Fnemeck. Skulker you said eloquently what I have been trying to say. I hear no one on this thread defending the SBT. And it seems pretty obvious that abruptly ending it will either cost in new taxes or loss of services. There is another problem. Selling it to the voters. If it even smells like a gift to business being paid for by them, it will not fly. But, if covered by a corporate income tax based on profits or ending or extremely curtailing MEGA handouts or other state moneys that go to business -- anything where a new tax or loss of service doesn't fall on the individual citizen -- it might have a chance. | ||
Futurecity Member Username: Futurecity Post Number: 227 Registered: 05-2005 Posted From: 69.220.69.172 |
Eliminating the SBT and calculating corporate income tax in a similar manner that the rest of the states do, makes the most sense. Which is probably why it won't happen here. | ||
Fnemecek Member Username: Fnemecek Post Number: 1521 Registered: 12-2004 Posted From: 70.236.147.73 |
Interesting observations from the longest serving member of the State Capitol Press Corp. http://www.gaylordheraldtimes. com/articles/2006/02/20/news/o pinion/opinion08.txt | ||
Lowell Board Administrator Username: Lowell Post Number: 2303 Registered: 10-2003 Posted From: 66.167.211.61 |
Exactly where this thread started and gets stuck. | ||
Irish_mafia Member Username: Irish_mafia Post Number: 362 Registered: 10-2003 Posted From: 69.221.79.80 |
Careful Lowell, Some have been chastised for actually quoting an opinion page here. | ||
Drm Member Username: Drm Post Number: 870 Registered: 10-2003 Posted From: 207.215.1.194 |
More accurately, someone tried to cite an opinion page as fact and got called-out on it. |
