I am voting NO on Proposal 14-1, commonly known as Prop 1, and heres why. First, its horribly worded, confusing, and contains a passage that can rightfully be seen as advocating for its passage: “. . . modernizing the tax system to help small business grow and create jobs in Michigan.” Red flag. Flowery trickle-down language has no place in this proposal. The proposal doesnt say it directly, a problem in itself, but this is about eliminating the personal property taxes assessed on businesses. Michigan business taxes, as a percentage of state revenue are already the 3rd lowest in the nation, per Ernst & Young and the Council on State Taxation (COST). According to a goodjobsfirst.org study looking back 15 years, MI leads all other states with 29 of what they call Megadeal subsidy packages, those over 75 million dollars. Trickle down doesnt work. We know this already. So, MI is a low business tax state, leads the way in business giveaways ... why does MI need this, and who is really benefitting? Not you. The Personal Property Tax is actually a tax on business equipment thats collected by local government. The proposal would replace that lost revenue from the 6 percent State Use Tax. Use tax revenues go to the school aid fund and the general fund. Who pays State Use Tax? You do: The use tax is a companion tax to the sales tax. Use tax of 6% must be paid on the total price (including shipping and handling charges) of all taxable items brought into Michigan or purchases by mail from out-of-state retailers. Credit is given for tax paid to another state. Use tax is also applied to certain services such as telecommunications and hotel/motel accommodations. Essentially this proposals asks us to trust the State that communities wont suffer a loss in revenue. Yet, since the funds would come out of the general fund pie, any number of other budget priorities could be made to suffer. One only need to look at our roads and our schools to see how that plays out. The only reason this proposal is on the ballot is because its constitutionally required under Article IX, Section 31. If the proposal passes, further cuts to allocations made from the State Use Tax to local communities wont require your input at all. We already give away more tax breaks to business than we should. There has been little to no return on our investments which were supposed to create jobs. That just hasnt happened, and wont happen this time either. Prop 1 is purposefully worded to confuse voters and obfuscate its real purpose. Its bad law all the way around. I am voting no, and urge you to as well.
Posted on: Tue, 29 Jul 2014 21:53:16 +0000
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