LANSING - Republican gubernatorial candidate Dick DeVos said Tuesday the majority of the $1.9 billion the state would lose by repealing the single business tax would come from new simpler and fairer business taxes. The rest, he said, would come from growth and unspecified cuts in the state budget.
But responding to questions posed to him as he filed over 33,000 signatures on his candidate petitions, DeVos said he would not be in a position to develop a business tax structure until he has access to all the state's data so he can examine the consequences of various options.
"I propose that a majority of the revenues will come from a proper business tax," he said. "The construct of the tax is very complicated. It should be fair, it should be simple."
The business tax, which produces about $1.9 million a year for the state, is set to expire at the end of 2009, but a petition drive that DeVos supports would move that date up to 2007.
DeVos repeated his intention to review what the 10 most economically healthy states have for tax systems to develop a new tax structure, but also said a specific plan would come "when I have the tools" to research the impact of the tax on various businesses.
Meanwhile, a radio advertising campaign began Tuesday encouraging listeners to sign the petitions for the proposed initiated SBT repeal law being pushed by Oakland County Executive Brooks Patterson.
The radio ad by a group called Americans for Prosperity contains bantering between two persons who bemoan the loss of 300,000 jobs in the last four years, and one calls the SBT a "crazy jobs killer."
DeVos said he would "absolutely" support Mr. Patterson's petition drive to repeal the tax if more is needed. That would include reaching out to organizations that believe the current tax treats them unfairly, he said.
Patterson said Monday the organization is going to need more funds to complete the petition drive by the end of this month.
Earlier in the day, National Federation of Independent Business State Director Charles Owens told a House subcommittee studying a replacement tax that any tax restructuring that does not consider the impact on small business is incomplete and "will be ineffective in improving our state's business climate."
He, too, suggests looking at what other top states have for their tax structures, and Rep. Fulton Sheen (R-Plainwell), chair of the House Tax Policy Business Tax Restructuring Subcommittee, said he plans to bring in outside experts to outline some of those alternatives.
Owens also disputed some points made by others, such as newly-named state Treasurer Robert Kleine, that Michigan is not a high tax state. While he said the state fares well on individual income taxes, the business tax burden is greater than average. And he said rankings that put the state in a favorable light for business climate have no clue how the SBT works.
Owens said unlike a key consideration of how to provide state revenues when the SBT was adopted, a new tax structure should put economic and job growth considerations first, and the structure should acknowledge the important role small business plays.
To that end, he said a new tax should continue to exempt those businesses that currently pay no SBT because they fall below a threshold level of gross receipts.
He also recommended basing some measure of the tax on profit, giving businesses no tax in years in which they make no profit; making it simple to assess and administer; and ensure it is comparative to other states (the SBT is unique in the U.S.).
Owens said expanding the sales tax to services while reducing the rate is similar to the direction proposed in the Fair Tax, but that proposal replaces a number of other taxes to get to that point.
Sheen said he may call in people from other states considered having successful economic models "and get some insights." Others who are likely to be called before the subcommittee will be experts from the Mackinac Center for Public Policy and national legislative groups such as the American Legislative Exchange Council.
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