Friday, June 13, 2008

A moratorium on MBT whining, please

Business owners need to sit down and shut up.

It's time for some tough love. We're all paying loads more for our salmonella-laced tomatoes, Ritalin and of course, gas. Our income and property taxes have gone up, as have local millages, and we pay scores of back-door taxes like higher tuition and activity fees at public schools.

Times are tough all over. But in the Legislature, you'd think it's only businesses suffering under the strain - and everything must be related to last year's evil tax increases. Evidently, they could never be impacted by the housing crisis, credit crunch or the fact that only eight years ago, gas used to be around $1 a gallon.

Most of us would kill for gas prices to inch up at the rate of our income taxes, by the way.

I would love to sit in session and listen to weeping for the homeless and the jobless by slack-jawed Rep. Jack Hoogendyk, R-Kalamazoo. But they don't have lobbyists, so tough.

Before you start scrawling your hate mail, let me make myself clear. I am not anti-business. I am anti-whining.

I don't believe in business taxes because businesses don't pay taxes; people do. I defer to eminent economists like Charles Ballard on that.

If we really wanted to fix our tax system so it brought in the money it was supposed to and was (gasp) fair, we'd adopt a graduated income tax while increasing exemptions and enact a modest across-the-board services tax.

Instead, we have the Michigan Business Tax and surcharge, on which senators have taken testimony across the state. Surprise! Only the disgruntled showed up as the Republicans expected, so they could issue the report they were ready to write all along: Dump the surcharge! And while we're at it, most of the MBT, because who needs a pesky $2 billion in the budget anyway?

It's time for a trip down memory lane.

Y'all wanted to dump the Single Business Tax, remember? The Legislature did your bidding. So when I hear those who lead the revolt like former Rep. Leon Drolet say the SBT was better and new taxes are just not faaaiiirr, forgive me for not sharing your crocodile tears.

The new MBT is a bit worse than the SBT and the surcharge is a disaster. But if your government has failed you, it's because your high-priced lobbyists have failed you. You could have ended up with slightly higher income taxes instead, but groups like the Michigan Chamber of Commerce screamed until the very end. So you got the reviled service tax, replaced by the nonsensical MBT surcharge.

I find it fascinating that when the service tax was passed, the Detroit Regional Chamber of Commerce quickly shrieked it would cost businesses a whopping $900 million to comply. Conservatives like Sen. Nancy Cassis, R-Novi, were outraged.

When the tax died 19 hours after being on the books, Cassis promptly introduced legislation to pay businesses back for their trouble. Only this time, she and the chamber claimed the $900 million was a wee bit overblown and wouldn't blow a big hole in the budget.

Talk about some fuzzy math. Makes it a lot harder to work up the sympathy for businesses claiming their tax bills have shot up 900 percent, because who really knows for sure.

Now no one wants to go back and take more tax votes to fix this mess. So a few Republicans will dutifully try to hack away at the heinous MBT, knowing that doesn't have a chance in hell of becoming law. Nobody wants to slash billions from the budget; it's just that the GOP tries to score political points off the idea.

"We've gone from tax-and-spend Democrats to tax-cut-and-spend Republicans," grimaces GOP former Senate Majority Leader Ken Sikkema.

Look, 40 percent of businesses didn't even pay the SBT, so naturally they'd lose by shifting to a tax paid by most. And while I don't doubt there are some businesses paying 900 percent more now (although I'm guessing all of my hate mailers will claim to), that's not the norm. Some businesses are doing quite well but are very quiet.

As Gov. Jennifer Granholm puts it: "They keep their head low and do the sign of the cross and say, 'Thank you very much.'''

It's mostly big manufacturers who will probably skedaddle to China in 10 years anyway. And no, that's not fair. But that's what happens when you buckle to interest groups and make tax policy on political grounds, instead of sound economics.

Life isn't fair. I would say it's not fair for people who put 35 years into a company to get axed so shareholders can make a bigger buck overseas, but such is life in the global economy.

Anyway, good luck getting your unemployment benefits extended. As any good conservative legislator will tell you, that would cost the budget too much money.


WCTaxpayers said...

Oh Pleease! You are one of the biggest whiners around. Your socialist leanings get in the way of your clear headedness. You are awfully free with other peoples money. They did what you wanted, raised taxes and spent more money. Now let's see what that got us. I think it was less employment and people and business flooding from the state.

In case you don't recognize it, you're part of the problem

Rose Bogaert, Chair
Wayne County Taxpayers Association

Susan J. Demas said...

Ms. Bogaert,

Your blathering doesn't warrant any other response than:

You lost. Get over it. Take some personal responsibility, as we true conservatives do.

Alan In Ann Arbor said...

I'm thinking if MS. Bogaert is so much for no taxes, no services, more joblessness and zero health care, not to mention crummy public schools, she really should move to a place more to her liking, say some third world country where people are dropping like flies on the streets and the wealthy are protected by armed guards.

She certainly doesn't belong in MICHIGAN.

Buh bye!

Susan J. Demas said...

She could found the Glorious Republic of Notaxistan, as some snarky columnist once suggested.