LANSING – Republican gubernatorial candidate Rick Snyder said Wednesday that if elected he would replace the Michigan Business Tax with a 6 percent flat corporate income tax, “untying the hands of job creators” by slashing their tax burden by an estimated $1.5 billion annually.

Snyder said that while his plan would raise much less than the current tax structure (a projected $700 million annually) he doesn’t support those that insist that tax changes must be revenue neutral because, he said, he’s willing to bet that public input would support eliminating some services that Michigan residents view as unneeded or too costly.

“It’s better to show real results for dollars than spend your way into right-sizing government,” he said. “It’s too easy to say ‘make revenue cuts revenue neutral.’ I want to see how far we can stretch those dollars.”

Snyder said the cost of doing business in the state is 2 percent to 4 percent higher for most companies because of the MBT, adding that a Tax Foundation study shows that for every $1 reduction in corporate taxes, wages increase $2.50 over five years.

When asked why none of his proposals address the social safety net, Snyder said he believes that by lowering the tax burden for businesses, he will open up more jobs for people in need, which he said is a better alternative than welfare.

Tom Shields, president of Marketing Resource Group, said that while it’s always been the classic Republican stance to offer jobs over welfare, even staunch former GOP Gov. John Engler realized the state needed some form of safety net.

“If (Mr. Snyder) hasn’t realized that yet it may be a sign of his inexperience,” Shields said.

As for Shields’ opinion of the tax plan, he said it’s really too simplistic to call a plan, he’d refer to it as more of an approach.

For example, he said, it doesn’t take into account all of the nuances of the tax system such as credits and that some industries such as insurance have a separate tax structure.

However, Shields said, at least Snyder is consistent, since simplicity and transparency so far seem to be trademarks of his campaign.

While the written plan doesn’t really address credits, Snyder did say at a press conference that he thinks his plan would reduce the opportunity for businesses to use “incentives” such as credits, since he said they are overused now.

As for Snyder’s competition, they say they are way ahead of him in replacing the tax fraught with problems. However, they said, Snyder doesn’t have the experience to form a plan.

Said Mike Cox’ Spokesperson Stu Sandler: “Mike Cox recognizes the difficulties job providers and families are going through in these tough economic times. That’s why Cox released a comprehensive plan four months ago that would give our job providers and our families a $2 billion tax cut. Snyder’s plan does not provide direct economic relief to Michigan families. Unlike Snyder, who only wants tax cuts for business, Mike Cox understands the only way we can get this economy going again is to provide relief to both job providers and families.”

U.S. Rep. Peter Hoekstra (R-Holland) welcomed the discussion of eliminating the MBT. “We called for the elimination of the MBT a long time ago,” said spokesperson John Truscott.

But Truscott said Hoekstra has not yet developed a replacement for the tax. “We’re looking at successful systems in other states, what works and what attracts business,” he said. “We know Michigan is not there right now.”

The proposed 6 percent flat tax was “worth considering,” but Truscott said he was not sure how Snyder’s proposal to use elimination of tax expenditures to make up any shortfalls from eliminating the tax would work and he questioned whether Snyder had the experience and skills needed to shepherd the proposal through the Legislature.

Asked about Snyder’s proposal, Oakland County Sheriff Mike Bouchard said the proposal doesn’t go to the issue of what would make Michigan a more competitive state overall.

Cutting taxes without tying it to specific spending controls does not go far enough in helping build the state’s image, he said. His goal is to make the state one of the five most competitive in the nation, and all proposals should be geared in that direction.

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