Thursday, September 01, 2011

GR Press Suggests Service Taxes to Replace Personal Property Tax

Trying not to break out in laughter. Or screams. Haven't decided which yet.

The personal property tax provides $1.2 billion to local entities. The money should be replaced dollar-for-dollar. That seems to be the intent of Gov. Rick Snyder, who said Wednesday he favors a “revenue neutral” elimination of the tax.

Finding a mechanism for replacing the tax won’t be easy. That said, lawmakers and the governor should view this as an opportunity for reform.

One option is to expand the state’s sales tax to a broad array of services. The state’s economy has gradually shifted from a goods-based economy to a service-based economy. Taxing services — an idea recommended by many budget watchers, including the group Business Leaders for Michigan — would follow that shift.

Oh yeah? Maybe two cents on the dollar, or something like that?

I have no idea how they are going to pull this off, given the disparity on how the PPT applies to different communities, but I'm pretty sure that you are going to pay for it.

I guess it takes electing Republicans to pass massive tax increases on citizens.

Edit to add: After further thought on the matter, I think the Republicans really screwed this up. They should have done this all at once. Most people don't understand the difference between the MBT and the PPT - all they know is that Republicans already cut business taxes, and then they turned around and cut school funding and public safety to do it, all while raising taxes on seniors, as well as eliminating tax exemptions that hit both the poor and middle class. The citizens are not amused.

Now, they have to turn around and raise taxes again, complete with another round of splashy headlines and screaming from the peanut gallery - unless they find a way to keep this a tax on business. And what are the chances of that happening?

If Snyder thinks his poll numbers are bad now, just wait...