Traverse City Record-Eagle

Archive: Sunday

March 16, 2014

Doug Luciani: Bettering Michigan's business climate

TRAVERSE CITY — The Traverse City Area Chamber board recently endorsed a projected state ballot issue in August to eliminate personal property taxes for small businesses and manufacturers.

It’s a significant step toward improving Michigan’s business tax climate. There are several moving parts to this piece of tax reform. In the days ahead, the Chamber and other groups around Michigan will help explain the importance of these changes to gain approval from state voters.

It’s a sure bet you’ll hear a lot about Michigan’s tax structure in the coming weeks and months in the grind toward the 2014 election season. With races for governor and the state Legislature in play, taxation for both residents and businesses will generate plenty of debate. But voters need to be wary of simplistic and skewed sound bites that produce a blurry picture of Michigan’s taxation and budgeting system.

One story line is that Michigan businesses received a big tax windfall during Gov. Rick Snyder’s first term at expense of Michigan pensioners, public schools, higher education, and social programs. That’s an easy claim to throw out in a 30-second attack ad but it’s an intellectually dishonest argument. Business taxation has a complex history in Michigan. For more than three decades the state collected a Single Business Tax initiated in 1976 to replace seven separate business taxes. The SBT proved cumbersome and eventually came under fire from businesses and politicians on both sides of the aisle. Starting in 2008, the SBT was replaced by the Michigan Business Tax. Crafted during a poisonous political climate in Lansing, the MBT turned out to be as unpopular as the SBT. Then-candidate Snyder called it a “job killer” and made it the focal point of his first campaign. A majority of Michigan voters apparently agreed.

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