Friday, September 21, 2007

ALL BLOGGED OUT FOR THE WEEK

I got "writer's blog" today - will start in again on Monday with the FairTax impact on Real Estate. Have a good weekend, all.
Bobbie
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2 comments:

Anonymous said...

Okay, I'll fill the gap with my post to the Chicago branch of the Federal Reserve. This will also let readers know how the FairTax is manifesting change in Michigan's tax system.

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If we accept Greenspan's thought that (paraphrased) "business does not pay taxes, people do" ("moving the final burden forward in prices" as you suggest) then the move to retail sales tax seems to make the best sense. (The national FairTax legislation (HR 25 / S 1025) - first introduced in 1999 - prescribes just that, federally. And it is growing into a nationwide movement. Among current presidential candidates, it is supported by seven Republicans and one Democrat.)

Michigan has the highest unemployment rate in the nation and is losing more jobs annually than any other state. To retain and attract jobs to our state we need to be a place where businesses want to locate. Michigan has one of the most unfriendly business tax structures in America, causing companies and jobs to go elsewhere. The new Michigan Business Tax (MBT) that replaces the Single Business Tax (SBT), creates a different set of winners and losers, and results in no net improvement to our business tax environment. Michigan business taxes discourage businesses from creating jobs in Michigan, forcing our children to move out of state and our property values to decline. While the MBT and other tax reform proposals replace some or all of these business taxes with other business taxes, there is an initiative afoot that virtually ELIMINATES Michigan business taxes and says "goodbye" to our income tax.

MI citizens are realizing that taxing business is a deceptive way of taxing citizens. It is time that we stop the dishonest practice of hiding business' costs for tax planning and compliance, along with all other costs of production, in the price of their products. These hidden taxes, additionally, inflate our prices and add to our global non-competitiveness.

Earlier this year, "Michigan FairTax" enabling legislation was introduced into the Michigan legislature to eliminate the current 6% sales tax, personal and business income taxes, Single Business Tax, Personal Property Tax, 6 mill State Education Tax on business and sales tax on all business purchases and replace them all with a simple retail sales tax (~9.5%) on goods and services. It is expected that post-FairTax prices will be similar to pre-FairTax prices (over an adjustment period of one year) due to reduced business costs (lower prices) and a significant influx of business activity (which has been exiting Michigan - and may continue to do so if the legislature's "fix" to a $2 bil gap in proposed spending for the new fiscal year is addressed by increasing taxes).

The Michigan FairTax, if enacted, will make taxes visible as it will appear on every sales receipt. By understanding the cost of Michigan government, Michiganders will be better equipped to demand accountability from their political representatives. What's more, audits, interest, penalties, annual tax returns, tax withholding from paychecks are gone. Wasteful compliance costs can be better directed to the more immediate goals of business (research, development, etc.)

The MI FairTax represents lasting tax reform as it eliminates the corrupting sale and purchase of tax favors between lobbyists and government officials, and it puts a stop to hidden taxes. It is a tax on consumption rather than income and it treats everyone equally as our Founding Fathers intended.

To protect the poor, and to assure that no tax will be paid on necessities, the MI FairTax provides for a monthly “prebate” to every household in the amount of what the tax would be for purchases up to the poverty level based upon household size. This untaxes the poor and causes the MI FairTax to be progressive.

Because of the prebate, a family of 4 spending $27,000/yr would have a 0% effective tax rate, and if the family spent $100,000 it would have a 6.9% tax rate, and so on up to the maximum of 9.5%. Even individuals that now have unreported/illicit income will be paying their share. Education expenses, because they are an investment rather than consumption, and used goods will be exempt from the sales tax. It is unconscionable that we allow ourselves to be taxed in a manner that invades our privacy, damages our economy, and costs us our jobs. There is no greater legacy for us to leave our children and citizens of Michigan than to adopt the simple,
efficient and fair MI FairTax. Just think, truth in taxation, MORE JOBS and NO MORE TAX RETURNS

To learn more go to the MI FairTax website: www.mifairtax.org.

If the "Michigan FairTax" is passed at the ballot box in November, 2008, its enactment would make Michigan a major magnet to domestic, and foreign business, as a tax-free zone in the United States.

September 23, 2007 at 11:51 PM
Bobbie said...

Thanks for taking up the slack, Ian. I appreciate it. Wouldn't it be nice if all states would adopt a FairTax compatible with the National FairTax, when enacted? Then we would truly be "paper-free", with no tax forms at all to fill out.

September 24, 2007 at 11:48 AM

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