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Michigan Legislators Eliminate Double Taxation

Thank you to Senate Majority Leader Richardville, Senator Nofs, Representative Poleski and Representative Shirkey for their votes in support of  HB 4361 and 4362. 


 


These bills eliminate the burdensome, job-killing Michigan Business Tax and replace it with a 6% Corporate Income Tax (CIT). 
 
The elimination of the MBT provides instant relief to the majority of our members – small businesses. This is NOT a tax break for big businesses, but will end the double taxation on nearly 95,000 small and mid-sized businesses.


Under the current system, businesses face a 4.95 percent tax on corporate profit, as well as a .8 percent tax on transactions and a 21.99 percent surcharge on their total tax bill. Snyder claimed during the campaign that, as a result, the cost of doing business in hard-hit Michigan is 2 to 4 percent higher than in most states. 


 


Mike Finney, head of the Michigan Economic Development Corporation, said in a written statement the plan would take the state on a "bold path toward broad economic development success." 


 


The Tax Foundation released an analysis earlier this month that said it should boost the state's competitiveness. The organization defended Snyder's decision to tax pensions, noting that Michigan is one of just three states that exempt private and public pension income. 


 


This is an historic opportunity for Michigan. It is not a step forward, but a leap. We have a chance eliminate the MBT and focus on moving Michigan forward.

Pros

If enacted, this will move Michigan from the 30th in the country for tax climate to 16th

"This puts us very much in line with the rest of the nation," Michigan Manufacturers Association Vice President Mike Johnston told FoxNews.com. "The overall plan is really good for Michigan's business climate, because what it says is Michigan's going to be open for business. ... We're reducing the burden on job providers."

Cons

AARP and most Democrats oppose the bills because most of the money would be made up with changes to the individual income tax structure. In the most significant shift, pensions would be taxed by the state -- though not Social Security. Most income tax credits and deductions would also be eliminated, like the Earned Income Tax Credit for low-income residents, or at least reduced, like the Homestead Property Tax Credit. 

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