Tag Archive for Bad Policy

Second Highest Sales Tax in the Nation and Chasing Away Employers

They_screw_the_little_guyWell, that’s what the Snyder/Calley Ballot Proposal to raise the sales tax 16.7% is – Second only to California – and we all know (or should know) what a fabulous job creator environment California is, right? Can you say exodus? Yes, high taxes are a factor driving business away but, massive regulatory issues also plague them, which destroys jobs and their creators. Interestingly enough, and very similar to the Golden State, our One Party Rule majority in Lansing, is on floundering course to the same tax and regulatory environment as can be reviewed here.

Oh! Then there is this wee bit of judicial tax policy “intent” legislating from the bench.

The controversy involves 134 out-of-state companies doing business in Michigan. They sued to collect $1.1 billion in refunds they believed they were due under the 2007 law. If they prevailed, the loss would have created a large hole in the state budget.

happy-snyderThe Michigan Supreme Court ruled in July that IBM could receive tax credits under the old law.
….

Tricia Kinley, senior director of Tax & Regulatory Policy for the Michigan Chamber of Commerce, said she had not reviewed Talbot’s decision [Engler appointee], but the chamber believed the Supreme Court decision on the IBM case should have settled the issue. She said the chamber found it “utterly disappointing and stunning” when the Legislature and Snyder signed the law to “undermine” the high court’s decision.

“That sends a chilling message to job providers,” said Kinley. “You can try to have your day in court, but even if you go through the great pains of litigating and you win, the Legislature might pull the rug out from under you.”

A spokeswoman for Attorney General Bill Schuette, who defended the state in the case, referred questions to the state Treasury Department, where no one could be reached for comment Monday afternoon.

Surprised the top cop and the taxman hide from their retroactive thievery? Not really, as it has become standard operating procedure for those in today’s government, and an electorate with a 30 sec. attention span. Nevertheless, isn’t this refreshing to see someone at the Michigan Chamber of Commerce has the integrity to speak truth to power? I’m actually glad to see a woman wearing the pants at the chamber who boldly calls it the way it is without pulling any punches on The Big Spending Party.

Yes, Mr. Studley, we are directing this at you. It’s time for your leadership against $700 million more for non-road related spending.

Ps. Uh-hum, tis the season, you know? Until we’re proven wrong, res ipsa loquitor

You Betcha! (19)Nuh Uh.(1)

Maybe A little Mis-Read?

A Traverse City Retailer might well feel the pain of his misplaced good cents.

There will be more than a few legislators regretting their turkey moves of additional regulatory rules during the ‘lame duck’ session.

But its not just the legislators. ‘Exhibit A,’ might well be a story that ‘celebrates’ the “early Christmas present” that Front Street Traverse City business received via SB 569 and SB 658 on Friday Morning. Demonstrating that the lobbying efforts of a few rent seeking business interests are not at all in line with taxpayer interests, the piece on Saturday’s TC Ticker starts with the ‘celebration’ of the “main-street fairness” law:

“It’s been years in the making, but state lawmakers have handed brick-and-mortar retailers like Bill Golden and others throughout Traverse City and Michigan a welcome Christmas present. Starting in October, more online retailers will have to add on Michigan’s sales tax to customer purchases — just like Michigan retailers have always had to do.”

Of course, folks around here (and very likely in all other places) understand that what is sold as fairness is usually anything but fair.

You Betcha! (19)Nuh Uh.(0)

So You Want To Buy Something?

So far, second thoughts might keep the additional burdens of doing business in Michigan at bay.

I have lost some big sales in other states because of ‘Amazon Laws’ in the past few years.

Its an amazing thing that happens when your cost of doing business in a state goes up by 10%. (Michigan will be 6%) You lose customers, they pay more, or you eat the costs.  The first option is of course the worst of the three, but when profit margins range between 15-20%, 10 points represents at least HALF the profits, and can be discouraging to even attempting to sell.

California has some of the most used shipping ports, so its natural that many warehouses are located there. It also has quite a large population.  Our business has historically sold more to California customers, than those in Michigan. But a few years ago, I was notified by one of my suppliers who drop ships for me in that state, that unless they had an exemption form on file for the customers, they would have to charge an additional 10% for the product to cover THEIR tax liability; CA Sales tax being 8% and an additional 25% tax for assumed mark-up.

I had a choice.  I could in some cases ship product all the way here, then ship all the way back, and salvage a few pennies, OR I could simply find a supplier for similar product in other state warehouses willing to ship to California.  The unnatural commerce that had to evolve (and quickly), wound up raising the cost of doing business.  It raised the cost and in some cases slowed service for the customers in California who were STILL expected to report their ‘USE tax.’

You Betcha! (23)Nuh Uh.(2)