Damn it Bouchard. (Services Tax support)

Bouchard recently became my 2nd choice with Hoekstra's tax stance. Not anymore. I'm really getting dissolutioned with the gubernatorial candidates outside of Mike Cox. I like Bouchard and Hoekstra personally, and met Bouchard on several occasions. Honestly, I expected better from both.

This stance needs to be called out, and the self proclaimed "Business leaders for Michigan" need to get called out to the carpet as well for pushing this crap with the services tax. Business Leaders for Michigan is formerly "Detroit Renaissance" and it is extremely influential with the Lansing insiders. They need to feel the heat, and so to the reps.

Bouchard joined Hoekstra in support of the services tax.

From the Detroit News:

Bouchard: I'll back services tax if it's neutral

Mark Hornbeck / Detroit News Lansing Bureau

Oakland County Sheriff Mike Bouchard told The Detroit News today he can support extending the sales tax to services -- as long as the net effect of reshaping the system is neutral or a tax cut.
Bouchard, a Republican candidate for governor, added the rationale for tax reform must be to make Michigan a better place to do business.
"We have to make ourselves more competitive with other states," Bouchard said in a wide-ranging interview with The News' editorial board. "That has to be the goal."

From The Detroit News: http://www.detnews.com/article/20100617/POLITICS02/6170489/1361/Bouchard--I-ll-back-services-tax-if-it-s-neutral#ixzz0rVOzevyx

Revenue Neutral? BS. The last revenue neutral idea came from the Michigan Business Tax. That was more of a disaster than the SBT. This so called revenue neutral idea (Business leaders for Michigan plan) cuts the sales tax a measly 1/2 cent and puts a 5.5cent tax on every dollar of services. 

Bouchard's right about the jobs by small businesses, but this damn services tax will chase them all away. 

Let's contrast Bouchard and Hoekstra's statement on the services tax to the others. 

Tom George - "The door is open" 

Rick Snyder - Opposes. Even Rick Snyder opposes this. I have my problems with Rick Michigan's stances on other issues, but he gets this big one right, at least in talk.

Mike Cox made his stance on this loud and clear.

“We’re not going to put Michigan back to work by taxing working men and women who are getting haircuts or picking up their dry cleaning for job interviews.  Michigan job makers and families need a tax cut, not a massive new sales tax on services.
“An expansion of the sales tax to services would kill jobs, drive businesses out of the State and further encourage out-of-control government spending.  With the nation’s highest unemployment rate and the third worst business tax climate in the nation, that’s the last message Michigan can afford to send.

When the other candidates are mostly caving on this major issue, Mike Cox has not.  He made his stance on this a long time in the past, and it hasn't changed. No Granholm services tax.

Granholm pushes for a new tax increase

The Matt Millen of Governors is at it again with her push for tax increases. From the Detroit News.

ansing -- Gov. Jennifer Granholm defended her proposal to extend the sales tax to services on a cable TV news show this morning, saying Michigan "has to invest in education" to convert from a manufacturing to a knowledge-based economy.
The governor said on MSNBC that Michigan has "a big, hairy audacious goal of doubling our number of college graduates." In order to do that, she said the state has to stop cutting education spending, which it did this year by $165 per student.
Since public school aid is funded primarily with sales taxes, the state needs to update and stabilize its sales levy by expanding it to include most services, Granholm said. In the past century, about 60 percent of consumer purchases were made on goods and today about two-thirds is spent on services, she said.

From The Detroit News: http://www.detnews.com/article/20100329/POLITICS02/3290392/1022/Granholm--Sales-tax-on-services-needed-to-bolster-education#ixzz0jaR7wdmG

This ain't new. Granholm pushed this in 2009

This is a big threat to occur however. It's not just Granholm pushing this. Pete Hoekstra has signed on board with this. Self proclaimed Business Leaders for Michigan is on board.

I don't see solutions, only gimmicks and demands that people bail out the government for their fiscal mismanagement. The problem is jobs. The sales tax revenues are down because people are spending less.

Pete Hoekstra supports a tax increase

We all know Andy Dillon supports higher taxes, but I'm a little disappointed in Hoekstra. He was until this my second choice for governor, and one where I wouldn't have to hold my nose in supporting outside of that one bailout vote that left me a bit sour. Well, now the bailout vote isn't the only thing that has me sour.

From the Detroit News

Beverly Hills -- Two early poll leaders in the Michigan governor's race -- Democrat Andy Dillon and Republican Pete Hoekstra -- found more common ground than differences Friday in a rare joint appearance at Detroit Country Day School.
They agreed term limits block political relationships in Lansing; it takes too long for businesses to get regulatory permits; right-to-work legislation would be too divisive; and the state needs to retool its tax system, including extending the sales tax to services.

From The Detroit News: http://www.detnews.com/article/20100320/POLITICS02/3200331/1409/rss36#ixzz0ik1tJarD

Extending the sales tax to services is a tax increase. We pay more for goods. More money goes to government which has proven itself unable to live within its means. Just as Pete Hoekstra voted to bailout the banks which fubared, he now wants to bail out government by taxing others like a democrat.

There's more:

Hoekstra said Michigan has a "crazy" business climate that drives investors to other states. He called for elimination of the Michigan Business Tax, as well as the levies businesses pay on equipment, and lowering the state income tax and the property tax on second homes to spur more out-of-state people to buy here. He favors initially ratcheting down the sales tax and extending it to services, but then going to voters to ask for a sales tax boost to offset reductions in other taxes

It's easy to be against the MBT. It was a poorly thought out rush job of a replacement to the bad Single Business Tax. (Thanks to Joe Hune for opposing that piece of crap). I oppose that too, but we have a spending problem more than a revenue problem, and punishing the types of businesses that may be growing is a piss poor way to spur growth. I'm fairly certain though that Pete Hoekstra's plan is a duplicate of self proclaimed "Business Leaders for Michigan" and Granholm's plan of a measly 1/2 cent cut on sales tax only to tax services at that race. It's a tax increase. Period, and needs to be opposed 100%. It was wrong when Granholm wanted a two penny tax. It's worse with BLFM's 5.5 cent per dollar tax increase.

It was fiscal liberalism from Republicans that cost us both the state house and congress in 2006. We don't need more of the same. Pete Hoekstra unfortunately seems to have caught beltwayitis and is bringing it here. No thanks Pete, and I expected better from you.

Graholm, Democrats, and fiscal liberal Republicans want to raise taxes again

Here we go again.From Peter Luke

LANSING -- Gov. Jennifer Granholm today endorsed taxing the sale of most personal services, reducing the sales tax rate from 6 percent to 5.5 percent, and using the proceeds to cut business taxes and bolster funding for K-12 schools. The tax overhaul provides the foundation of the fiscal 2011 budget plan that Granholm presented to lawmakers in the Capitol this morning. The blueprint closes an estimated $1.6 billion gap in revenues and expenditures.

...

Additional revenue from the tax would finance a phaseout of the $600 million, 2007 surcharge to the Michigan Business Tax and provide an immediate $500 million for the state school aid fund.
The base would continue to exclude business-purchased services, health care and education such as college tuition. It presumably would include services such as entertainment, car repair, dry cleaning and could include accounting, legal and insurance.
Rep. Mark Meadows, D-East Lansing, has a bill to expand the base and reduce the sales tax rate to 5 percent. The key for Granholm and supporters of the idea will be to identify what services will be taxed and then protect the list from an expected lobbying onslaught from interests seeking carve-outs. A 2007 sales tax expansion collapsed, and was replaced by the MBT surcharge, because it was riddled with loopholes. Ski tickets were taxed; golfing fees were not.
"As this gets more serious, we're going to have more people coming in and saying it shouldn't include us," Meadows said. "It's better to have everybody in (the base) so no one feels jealous about who gets out."
Another flashpoint will be Republican resistance to a tax plan that generates net new revenue for government services and education. Any tax overhaul, said Sen. Mark Jansen, R-Gaines Township, also has to come after passage of reforms, such as his proposal to make every public employee in the state contribute at least 20 percent toward of the cost of health insurance.
The Business Leader's plan is revenue neutral overall in that every dime of additional sales tax revenue pays for eliminating the MBT surcharge and cutting a key MBT rate on business revenue.
But the business community is split over the idea.
Michael Johnston, head of legislative affairs for the Michigan Manufacturers Association, said every business in the state would benefit from BLM's plan. "We compete on the basis of cost with the lowest cost location in the world," he said. "Our tax policy, if it's going to be successful in creating jobs, has to understand that dynamic."
Richard Studley, president of the Michigan Chamber of Commerce, said business tax reduction should be paid for through meaningful reductions in the size of state government, not "overly complicated, meaningless tax shifts. The problem isn't the method of taxation, it's that we're losing taxpayers."

Now why did I put that title up to include liberal republicans? It's because of this. Business Leaders of Michigan. I heard a lot of touting of them up at last years Mackinac Conference. I discussed there proposals when it came out back in 09. Some of it was good. Some of it was horrible.  The sales tax was horrible, and Granholm had a point asking where the support was from them when she pushed a lower 2 cent services tax. These people want it higher.

BOTH are wrong. Damn wrong. I'll be making some phone calls. We need to call our reps and let them know that new taxes are unacceptable, and that we control the Republican Party, not Business Leaders of Michigan. When Business Leaders of Michigan are right, we will support them. When they are wrong, we don't.

This is a tax increase. Period. 1/2 a cent off the sales tax and 5.5 cents increased on things that aren't taxed, so bigger businesses don't have to pay a surcharge. While I agree that the surcharge has to go, the solution isn't increasing taxes on everybody. The solution is less government, more freedom, real reform, less gimmicks, and tightening of the belts.

There's also this from The Detroit News

Gov. Jennifer Granholm today proposed cutting the sales tax, extending the levy to some services and using the extra revenue to ratchet down business taxes over two years and stave off a $400 million reduction in public school funding. She also called for using a tax credit to reinstate the $4,000 Promise scholarships for college students while requiring graduates to work in Michigan at least one year to be eligible. Further, she would slap a 3 percent tax on physicians' profits to help finance Medicaid health care for the poor and a surcharge on airport rental cars to fund the Pure Michigan tourism promotion.
Granholm also proposes maintaining public school and higher education spending and revenue sharing at current levels. She also would not cut trooper numbers.

From The Detroit News: http://www.detnews.com/article/20100211/POLITICS02/2110449/1409/METRO08#ixzz0fGTFt4ON

The Doctor's tax proposal is back!  Rent a car tax to fund commercials. This budget is a shell game and gimmicks, just like every other one  I've seen for the last eight years.

This is like most Granholm budgets, unacceptable.

Business Leaders for Michigan plan - Some of it good, some of it horrible

The group that used to be Detroit Renaissance is now "Business Leaders for Michigan." Some hype came out about the business plan it endorsed. The Detroit News has its proposal out.

From the Detroit News

A newly formed coalition of Michigan CEOs announced Thursday it would support extending the sales tax to most services if it is lowered. Business Leaders for Michigan, an expansion of Detroit Renaissance that includes 25 corporate captains from across the state, would cut the 6-percent sales tax rate to make the change initially revenue neutral. But the plan would raise additional revenue in the future as the state continues its shift away from a goods economy and toward a service economy. David Brandon, chairman of the group and CEO of Domino's Pizza, said a "sales tax on services has to be part of the equation" as the state modernizes a tax code built for the 1950s.

Gov. Jennifer Granholm proposed a 2 percent tax on services two years ago but the plan died in the Legislature. Lawmakers passed a tax on some services late in 2007 but the levy was scrapped.

"The governor welcomes all ideas," said Liz Boyd, spokeswoman for Granholm. "But it is ironic that the business community is now calling for a sales tax on services when two years ago they're the very ones who killed it when the governor proposed it."

Past studies have indicated the state could reduce its sales tax rate to about 5 percent, if it were extended to services, and generate revenue that the 6 percent sales tax on products raises today.

The Matt Millen of governors Granholm's got a point. That's because this services tax plan is a Matt Millenesque idea from this group. NO NEW TAXES. I don't care which side it is from. This will factor heavily in my voting plan if David Brandon ever does decide to run for office. No vote here.

There are the rest of the idea.

The group also proposes:

• Cutting the state government workforce 5 percent to 10 percent and lowering compensation, including benefits, to reflect the national average. - I agree to a point, but I think we need to take a longer look at government in general, not just salaries and workforce.

• Eliminating the state tax on business equipment once the economy starts growing again.- Agreed.

• Scuttling the 22 percent surcharge on the Michigan Business Tax and reducing the corporate levy by 60 percent overall. - Agreed.

• Enacting prison management and sentencing reforms to save $400 million. - Agreed if the plan is what I think it is. Good luck selling it.

• Eliminating binding arbitration for local police and firefighters. - Undecided. Will the alternative cost more or less?

• Ending optional state services, such as programs for Medicaid recipients not required by the federal government. - Agreed.

• Consolidating administration of the state's 500-plus school districts by cutting per-student funding to districts that don't share services. - Agreed to an extent, but this will be real tough to sell.

• Reducing the number of colleges and universities "to a number the state can afford."- Is this state schools only?

• Adopting a funding formula for roads and bridges and supporting mass transit services in urban areas.- Agreed with the first, the latter only if it pays for itself. No more people movers or Wally trains with government money that does not get used.

Business Leaders for Michigan has its own website. They will likely be, for good, bad, and in between, a significant power in Lansing with the new budget issues.