A West Michigan lawmaker introduced legislation Wednesday to eliminate the state’s controversial and oft-slammed Michigan Business Tax and its 21 percent surcharge.
The Grand Rapids reports that State Sen. Dave Hildebrand (R-Lowell) introduced the legislation in the state Senate Wednesday morning. There is similar legislation pending in the state House, but it targets repeal of the surcharge only.
The MBT and the surcharge were created in 2007 to replace the Single Business Tax, which was also unpopular with business and GOP lawmakers. The MBT was instantly disliked by the GOP, and once they claimed majority in the House this past November they planned to remove the law as quickly as possible. The Senate was able to go from a simple majority to a super majority of Republicans in November’s election.
The two taxes raise an estimated $2.2 billion for the state’s general fund.
Gov. Rick Snyder has also hammered on the tax saying he wants to repeal both the MBT and the surcharge and replace them with a six percent across the board tax. Such a plan would push Michigan’s projected budget deficit over $2 billion, but Snyder says cuts and restructuring of government will bridge the deficit gap and create a balanced budget.
The Grand Press cites the subscription-only capitol news outlet MIRS as quoting Hildenbrand thusly:
“Obviously, some people are saying we’re creating a huge hole in the budget,” Hildenbrand told MIRS “I recognize that; I’m not hiding from that. . . . But I’m saying we have less money to provide services for state government.”
Grand Rapids House Democrat Roy Schmidt says he worries about eliminating the tax without having a plan in place to replace the eliminated revenues.