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News and quick-hit commentary from around mid-Michigan ... from the Morning Sun.

Thursday, August 10, 2006

Two thoughts on the SBT repeal ...

The repeal represents a clash of ideologies. One side says to tax the people who have money -- the old "I rob banks, because that's where the money is" approach. Business has money.

The flip side is the conservative approach that says that businesses don't pay taxes anyway. A business tax simply forces the business to pass the cost along to consumers in the form of higher prices. It's somewhat dishonest, in this line of thought, because it shifts the blame for the cost of government away from lawmakers. People gripe about the cost of cars, not their taxes.

This is sort of like the so-called "employer's share" of Social Security taxes. Yeah, right -- I work for that money, too.

The other thought is that the SBT won't be gone for another 16 months. Now that there's a deadline, a plan to deal with the lost revenue has to come together. It's similar to the school finance situation of the mid-1990s. When then-state Sen. Stabenow pushed through the repeal of property taxes for school support, there was no plan to replace them.

There was, however, enough time to put together Proposal A, which passed and still is there today. Proposal A isn't perfect, but people forget that it ended up generating much more revenue for schools, partially evening out the massive disparities in per-pupil funding, and providing a steady flow of income to schools that doesn't depend on the vagaries of local politics.

And it was a bipartisan effort.

Success in this case will be a bipartisan Proposal A for business. The question is whether Michigan's bunch of rookie legislators are up to the task.


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