Bishop said he's frustrated with House Dems' unwillingness to negotiate on SBT
Thursday, May 31, 2007
MACKINAC ISLAND-Senate Majority Leader Mike Bishop today said the Senate Republicans' latest proposal to replace the state's Single Business Tax is an extremely fair and reasonable compromise that benefits a majority of Michigan businesses and that he's frustrated with the House Democrats' refusal to put forth an alternative if they refuse to accept the Senate's offer.
"Since we first put forth our plan last January, Senate Republicans have been looking for the best option to replace the Single Business Tax that will keep Michigan competitive in the 21st century," said Bishop, R-Rochester. "For the past several weeks we've continued to offer up plans and proposals, hoping we can convince House Democrats to negotiate and find a reasonable compromise to help give some certainty to Michigan business owners and job providers.
"Once again last night, we put forth an offer that provides generous personal property tax relief for manufacturers and created numerous incentives for small businesses to expand their operations in Michigan, and House Democrats continue to turn us down without offering a better solution."
The Senate Republican's latest SBT replacement included the following:
Stimulus for Economic Growth
The SENATE REPUBLICAN proposal would have created a fair, equitable tax structure, allowed companies to expand, encouraged new economic development and provided a strong incentive for businesses to come back home to Michigan. The plan would have given a much-needed boost to Michigan's lagging economy.
Broad-Based/Low Rate
The SENATE REPUBLICAN proposal involved a reasonable business income tax and a mix of modified gross receipts tax, and firms with gross receipts under $350,000 would have paid nothing.
Tax Relief for Job Providers
The SENATE REPUBLICAN proposal would have cut the taxes of job providers beginning in 2009. In 2008 the proposal would have replaced all of the projected SBT revenue. (The proposal was revenue neutral in 2008.)
Generous Personal Property Tax Relief
SENATE REPUBLICANS would have provided a 24 mill exemption for industrial personal property and 18 mills for commercial. The SENATE REPUBLICAN proposal would have allowed for a 30 percent credit on remaining PPT liability for industrial personal property, phased in over a three year period beginning in 2008. (Note: This represents a 55 percent reduction in PPT relief! In 2005, the governor's plan only called for a 35 percent reduction, and the Big Three were supportive of that).
Significant Exemption for Small Businesses
The SENATE REPUBLICAN OFFER included a "Michigan Entrepreneurial Exemption," or M-E 2, that would have helped small businesses. Firms under $25 million in gross receipts would have paid no taxes for up to five years if the firm or business met certain job growth and investment criteria. This exemption would encourage small-business growth and entrepreneurship.
Many business representatives in the Senate Finance hearing today stressed the importance of the Legislature not rushing the process, but instead adopting a new business tax that takes a long-term approach to Michigan's economy.
"This opportunity comes along once every 30 years, and I don't want to hear my constituents complaining about this tax for the next 30 years," said Charlie Owens, state director of the National Federation of Independent Business. "It is very important to get this right, and I am concerned the House plan is slanted toward a few large companies at the expense of small businesses."
Scott Hummel, representing the Michigan Association of Insurance Agents, agreed with Owens on the effect of the House plan on small businesses.
"Small and medium-sized businesses may be hurt under the House plan due to the high rate, and I see you have addressed that in your offer," said Hummel. "You have maintained the diversification for all sectors, and I don't know why the House rejected the plan."
Kurt Berryman, from the Auto Dealers of Michigan, added, "It's a natural compromise. I believe it's a more stable tax plan. It is good for Michigan. I think everyone can be a winner under this plan."








