LANSING – A blockbuster ballot

proposal unveiled Thursday by a liberal group would raise the Corporate Income

Tax from 6 to 11 percent and put the resulting $900 million in new revenue

toward roads.

The proposal is a voter-initiated

act, so supporters will need to gather signatures from at least 252,523

registered voters to put the proposal before the Legislature. If a petition drive

is successful, the Legislature, with its business-friendly Republican

majorities, presumably would take no action on the measure, meaning it would go

on the November 2016 ballot for voters to decide.

The Small Business Association of Michigan opposes the effort to initiate a ballot proposal.

 
“For those small businesses that are organized as C corporations, this massive tax hike would have a devastating impact on their ability to stay profitable and create employment opportunities,” said SBAM President and CEO Rob Fowler. “It’s undeniable that if you raise taxes on Michigan companies, especially those that compete with businesses in other states, it will be bad for our citizens and our economy. Other states with whom we are battling for investments and jobs are moving aggressively to lower the tax and regulatory burden on their firms. Although SBAM supports funding our roads and bridges, now is not the time to roll back the clock and impede the competitiveness of Michigan businesses.”

 

The proposal comes about four years

after Governor Rick Snyder and the Legislature, also under GOP control at the

time, slashed the tax burden on businesses. They repealed the old Michigan

Business Tax, except for those businesses with outstanding MBT credits that

wanted to stay in that system, and replaced it with the CIT.

The result was an initial reduction

in the business tax burden on businesses of more than 80 percent. The MBT had

raised about $2 billion, and now combined business taxes raise about $500

million. Most of the lost revenue was recouped through ending credits on the

individual income tax and extending the income tax to pension income.

Businesses have been leading the

charge for years to increase funding for roads. Ever since the business tax cut

of 2011, Democrats have said businesses should directly bear the burden of some

of the new revenue, and House Democrats recently unveiled a transportation

proposal that includes a CIT increase. Business groups criticized that proposal

as a return to damaging tax levels that hindered the state’s economy.

The $900 million in new revenue

would cover three-quarters of the $1.2 billion all sides agree is needed at

minimum to put Michigan on the path to moving most of its roads into good

condition.

This story was published by Gongwer

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