Michigan Governess, Jennifer Granholm says that we can’t repeal a hurtful tax program until we’ve found a way to make its repeal revenue neutral – thus lending credence to the libertarian argument that leviathan grows increasingly larger. In fact, “on Tuesday [Granholm] called Republican lawmakers’ decision to repeal the [Single Business] tax “an act of extreme cowardice.”
If you’re not familiar with the concept of a “single business tax,” don’t worry. You shouldn’t be. Michigan is currently the only state in the Union which uses such an archaic, absurdly biased (against small businesses) tax structure. I’m hard pressed to devise a system of taxation that could be more detrimental to job growth. Todd Bennington, of the Traverse City (MI) Record Eagle describes it thusly:
The Single Business Tax, a true Michigan initiative, is one of the most anti-growth taxes on record. No other state in the nation punishes employers by taxing them for hiring more workers and expanding factories as Michigan does
Yes, you read it correctly. The SBT taxes employers as a function of their total payroll. Add an employee, bam! Taxes just went up.
Can’t we ever repeal a tax without worrying about what which robbers are going to lose some of their booty? Granholm, in fact, vetoed a proposal last year to abolish the Single Business Tax, but yesterday’s vote, which eliminated the SBT two years ahead of schedule is veto-proof. Granholm expresses her concerns with crafting a replacement program to capture the $1.9B that would be “lost” by the repeal of the SBT – but she appears oblivious to the interim problem of perpetuating a system that holds down employment, gives incentive for all the young, smart people to move out-of-state, forces businesses to relocate, and in general, harms the consumer and taxpayers alike. The Tax Foundation astutely points out, however, that the State of Michigan is losing many more millions in lost jobs and lost productivity that aren’t objectively quantifiable.
We don’t sit idly by and let cancer patients bleed to death from minor wounds merely because we haven’t a sufficient method to treat their malignancy – nor should we sit idly by and watch the State’s economy crumble from within merely because a hack politician (and Candian ex-pat, no less) now has fewer funds to allocate to her pet special interests.
