Sunday, September 30, 2007

Tax on services passes out of committee

UPDATE: The House is voting now. Six Dems are up as "no". Where have I heard this story before?

From the Detroit News-

Nearly two dozen services -- including ski lifts, tanning booths and dating, consulting, landscaping and janitorial services -- would be taxed at 6 cents on the dollar under a measure passed out this morning by a special joint House-Senate committee.

The expansion of the sales tax to 23 services would raise $605 million from Dec. 1 through the end of the fiscal year next September and $725 million for a full year, according to state Treasurer Robert Kleine. A conference committee passed the bill 5-1.

Golf fees, cable TV, sports and movie tickets and dry-cleaning services, all which were part of the discussion, will not be taxed under the plan.

"We tried to identify services that people did not have to purchase, they are discretionary," Kleine said.

More from the Freep-

A vote in the full state House could come as early as midday, but the legislation's fate was very much in doubt.

In addition to the service tax, the tentative deal to avoid shutting down many state services at midnight included hiking the income tax to 4.35% from 3.9%, raising another $750 million, along with a roster of what has been termed "government reforms" sought by Republicans in return for grudging support of the tax hikes.

Almost every element of the proposed deal was under attack in some fashion, and progress excruciatingly slow, as the time left to avert a shutdown began to be counted in hours instead of days.

With the debate on taxes far from settled.

Business interests, especially lobbyists for the cable and satellite TV industry, worked furiously overnight to sidetrack the expansion of the sales tax to services, arguing it would put a damper on economic growth.

Stand up to this, lawmakers. Don't let special interests derail this deal, or we will hold YOU responsible.

Here's a choice quote-

Charles Owens, state director of the National Federation of Independent Business, said lawmakers were deluded if they thought they could escape the wrath of anti-tax voters by pushing significant increases in two major taxes instead of one.

"I don't understand why (a legislator) would want to take two tax votes," Owens said, "We hope it falls apart."

The headlines will read, "Business interests derail budget deal".

Should be good publicity for the Republicans, yes?