An appeal to reason by Apocaplops
StateGate seems like it might be nearing its conclusion with an 13th hour deal reached at 4 AM when legislators were apparently too tired to fight anymore. The LSJ reports:
"This budget agreement is the right solution for Michigan," Gov. Jennifer Granholm said in a news release after the vote. "We prevented massive cuts to public education, health care and public safety while also making extensive government reforms and passing new revenue. With the state back on solid financial footing, we can turn our focus to the critical task of jumpstarting our economy and creating new jobs."
Leaving aside the question (for now) of how much harder it will be to create jobs with a reputation as a state that is financially unstable, let's take a look at what was added to an income tax hike - the "sales tax expansion", a 6% tax on services. The Detroit News lists some of the services that might be taxed in New levy to tax 23 services.
The list appears to make little sense, with ski resorts subject to the tax but not golf course, janitorial service providers but not plumbers, tanning but not haircuts and financial & business consulting but not legal and accounting services. What do you bet that TV ads won't be subject ... and also that we'll be hearing a lot more like this from every industry affected?
"Any service tax should be across the board on all services and not single out specific areas of the economy," Stephen Kircher, president of Boyne USA Resorts' eastern operations, said in a statement.
One Comment
I have to think that the service tax will eventually become universal, the legislature simply does not want to push too much all at once. As it sits, the tax will be confusing and unfair.
Still, I'm glad the politics got set aside by a few members so the state can continue to function.
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