Thursday, November 30, 2006

Meet the MBT: Let the spin begin

Tom Walsh at the Freep has a concise story on this. Kathy Barks Hoffman provides a more detailed write up. The Lansing State Journal comes up with a great editorial. All worth a read.

I'm going to riff off of Walsh. He had the best line. See if you can spot it.

Call it Gov. Jennifer Granholm's almost-excellent plan for a Michigan Business Tax to replace the hated Single Business Tax.

And call state lawmakers a bunch of slackers and crybabies if they don't agree on a business tax replacement for the SBT next month in their lame-duck session.

Problem is, it's a pretty significant almost that keeps Granholm's plan from being a slam dunk -- and may provide Republican legislators, still smarting from losses in November's election, an opportunity to keep aggravating the Democratic governor.

Then we go after them. If all they want to do is aggravate, doesn't it become obvious (again) that they only serve their special interests and not Michigan as a whole?

The significant "almost"-

A big chunk of the $2.4 billion in annual Michigan Business Tax revenue -- about 43% of it -- would come from a 0.125% tax on the assets of a business, ranging from its cash to its buildings to accounts receivable and such ethereal valuables as amortizable intangible assets. These might be trademarks, copyrights, customer lists and other things that have a finite lifespan but that many companies carry on their balance sheets as "goodwill," an intangible asset not taxable under the proposed MBT.


And if a company's foreign assets are exempt from the MBT -- as they would be under the Granholm plan -- would this provide an incentive for a company to move assets overseas? We certainly don't need more of that.

Seems to me I remember Levin addressing this at the federal level back in August, perhaps with help from Washington (snicker) that concern will be abated. As far as hiding assets here, well, that is definitely something to consider.

Patrick Anderson is the Republican go-to guy for all things economic, cited many times by the conservatives as they push their slash and burn policies, and even he likes this plan. Whether that is cause for rejoicing or concern remains to be seen, but it might be a good sign.

East Lansing economist Patrick Anderson of Anderson Economic Group praised the plan overall.

"This is a clever approach at recreating the original benefits of a Single Business Tax, which was a very low rate and a broad base, and it would have relatively smaller disincentive effects on investment and employment in Michigan," he said.

Sikkema wants this done. He has a legacy to think about.

Senate Majority Leader Ken Sikkema, R-Wyoming, said he is reserving judgment on the governor's proposal but called it "a serious and credible plan that deserves immediate review."

He added that he'd like to see the personal property tax on equipment eliminated or phased out, something other GOP lawmakers echoed Wednesday afternoon during a Senate Finance Committee meeting where the plan was discussed.

DeRoche is being cagey. He is the one to watch- the puppet of the insurance companies and the "more tax cuts" crowd.

House Speaker Craig DeRoche, R-Novi, has pushed for a sizable cut in business tax revenue. He said he planned to look at the governor's plan with an open mind, but said, "For me, the priority will be reform, not revenue for the government."

Nancy Cassis seems to think it's not going to happen this year.

Sen. Nancy Cassis, R-Novi, who chairs the Senate Finance Committee that will consider the five-bill package, added: "We are more together than we are apart." Cassis said it's "possible but not probable" for lawmakers to approve a new business tax scheme by year's end.

Rick Albin seems to think there should be some horse-trading involved. Sounds like extortion.

It may not be so much about the plan - which Republicans say addressed many of the problems they had with the governor's first offering - but rather what she is willing to give up in exchange.

Teacher pensions and insurance, or welfare reform, for example, could be bargaining chips.

The question many are asking in Lansing may well be - do you want to make a deal?

Let's see, Granholm has presented two plans in two years. Republicans nixed the original plan last year. Republicans promised to work on the plan this year, they did not. Republicans then promised to work on the plan "after the election", and then tried to back out, saying it shouldn't be done in such a short period of time. Here is a plan that is being praised- and they want to "make a deal"? Are you kidding me?

Walsh had it right when he said "slackers and crybabies". If they refuse this without coming to the table with an alternative, or telling us what programs they would cut, they deserve all the scorn we can throw at them. Enough is enough.