While our State suffers from the worst unemployment in the country, our legislators are doing their darnedest to make it even worse! I’ll try to explain this mess as I see it. In 2007 they replaced the “Small Business Tax” with the “Michigan Business Tax.” This tax will take effect in 2008 and will take $220,000,000 more than the old SBT.
They didn’t stop there. Then they raised the State Income Tax from 3.9% to 4.35%, about 3 or 4 weeks ago you should have seen a drop in your take home pay check. This has affected almost all employed Michiganders.
Now for the confusing part for most people, the “Sales Tax on Services”. This proposition has been completely repealed, even though it was technically in effect for about 15 hours companies will be given amnesty if they didn’t collect sales tax during that period. The proposed “Sales Tax on Services” has now been replaced with “a surcharge tax.” The surcharge tax is 22% on top of your existing businesses tax liability capped at $6million to protect GM and Ford. So lets use some simple numbers to make this a little more tangible.
Allocated Gross Receipts: $1,000,000
Michigan Business Tax: (4.95%) = $49,500
NEW Surcharge (22%) = $10,890
Total Tax Liability Before Credits = $60,390
I think our government needs to learn to live within its means. What do you think?
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