Eye on Michigan: Follow-Up

Last week I provided a review of what I considered some of Michigan's leadership failures in regards to the economy. I stand by my opinions, however, I did a bit more research on Michigan's fiscal policies, and was pleased to see the following item:

The Michigan Business Tax Surcharge Will Be Phased Out Over the Next 8 Years.

While the surcharge was ludicrous to begin with, and 8 years is a long time to wait to repeal this piece of unfavorable tax legislation, it is a step in the right direction.

Also, some results from an interesting survey from the Kalamazoo Chamber of Commerce -business owners indicated the way that the tax changes enacted last year will be impacting them:

• More than 60 percent of the 690 business responding said the MBT is more complicated than its predecessor, the Single Business Tax:
• 77 percent said they are now worse off than under the SBT
• 31 percent said they would delay or cancel wage and salary increases
• 24 percent said they would delay or cancel capital improvements
• 15 percent would move an expansion or cancel a location in Michigan
• 14 percent would lay off employees.

Business don't want to take these kinds of actions, but when the tax environment produces changes that are not easily absorbed by their business plans, they are forced to modify. We should observe that businesses are not never-ending stream of cash flows impervious to statutory changes in tax code.