Political perspective: Michigan tax structure debate continues.

As we inch ever-closer to the November 7 Election Day, the likelihood of significant changes to Michigan's tax structure, related to the Single Business Tax (SBT) or not, continues to diminish. Politics has certainly clouded the policy agendas in Lansing, as all 148 state legislators are joined

Governor Jennifer Granholm's footing has held in terms of requiring revenue neutrality--essentially that any revenue lost through tax cuts or elimination must be replaced. The Michigan House and Senate sent House Bill 5743 to the Governor. The legislation would accelerate the elimination of the SBT currently scheduled for 2009 in statute. On March 31, the Governor vetoed the bill; however, just a few days later, she issued a challenge to House Speaker Craig DeRoche (R-Novi) and Senate Majority Leader Ken Sikkema (R-Wyoming) to eliminate the tax and find a replacement by the end of the year.

The tax debate is difficult and politically charged on a good day; in an election year it becomes almost radioactive--making risky, drastic change nearly impossible.

In addition to the petition drive championed by Oakland County Executive L. Brooks Patterson to place the SBT elimination on the ballot in November for voters to decide, two proposals are receiving attention in the Lansing-centered debate. House Tax Policy Committee Chair Fulton Sheen (R-Plainwell) is advocating the Fair Tax proposal, calling for the elimination of the SBT, personal income tax and personal property tax combined with an expansion of the sales tax base and an increase in the rate. The Detroit Regional Chamber of Commerce has proposed a business license fee structure to replace the SBT, based on gross receipts rather than activity, setting an annual fee for doing business in Michigan.

The MACPA State & Local Tax Task Force and its Tax Restructuring Subcommittee remain actively engaged in monitoring proposals and continuously offering objective and independent review and analysis of new ideas when called upon. For more information on the MACPA's involvement or updated news from the debate, contact the MACPA Government Relations Department by e-mail or phone 248.267.3710.