Feb 11, 2007

New Michigan sales tax on services could hurt Britt and Paris


The businesses that have gotten away for years without paying for the public services they consume are up in arms over Gov. Granholm’s proposed 2-percent tax on services, and they are using the lame excuse that the tax is extremely complicated for businesses and consumers with increased paperwork, according to an article in the Detroit News business section Friday.

But at lest one group, the 884-member Independent Accountants Association of Michigan, says the tax is needed and won't be too much hassle.

As part of a plan to make-up a $3 billon shortfall in the state budget without even deeper cuts in essential services that residents depend on, the Governor proposed her budget that calls for a combination of spending cuts and a 2 percent levy on services. For the average family that will mean an increase of about $65 a year, or a cup of coffee a week. But business groups like the Michigan Chamber of Commerce and the State Bar of Michigan are opposing the investment in the state’s future because for the first time many of their members will be taxed.

They are obviously ignoring the fact we are moving from a manufacturing-based economy to a service-based economy, and they are only worried about protecting their bottom line at the expense of the rest of the state. Some of the reasoning they are floating for opposing the tax that calls for 2 cents on the dollar is laughable.

Henry Cooney, president of the Metro Detroit Bar Association, is quoted in the article as basically saying attorney’s fess are so expensive they should not be taxed. "A legal service is not discretionary. When you have to hire an attorney for a divorce or a bankruptcy, it's unfair to ask your client to pay tax on top of a service that is not inexpensive."

Many groups, including the Michigan Institute of Laundering & Drycleaning, will inform members the cost will be "much higher," said Kelly Johnston, the institute's director of government relations. It doesn’t really matter if it’s not true.

But this is perhaps the most ludicrous excuse so far:

The cost increase will cause customers to think twice, said John Lieberman, owner of the Bark Busters Home Dog Training franchise in Oakland County. "It increases the effective price of our service, and it's a disincentive for people to have their dogs trained."
With basic dog training starting at $495, the sales tax would add at least $10 to his services, Lieberman said. "If you're providing a premium service that costs more to begin with, people need to build a case that it's worth the extra cost."


If you can afford to pay $495 to have someone else train your pooch for you then I seriously doubt $10 is going to break the bank. Maybe we can call it the Paris Hilton or Brittany Spears tax because if we enact it they will not be able to carry those little French Poodles into nightclubs and premiers with them.

The Michigan Chamber Commerce - that represents more than 7,000 employers, trade associations and local chambers of commerce in the state – is obviously against the tax. Has this group ever endorsed a Democrat? This group is perhaps the biggest hypocrites of all. They are in the process of lobbying state Legislators for a business tax reduction of $500 million. Where to make that up? This farsighted group is saying cut it from education. Great idea. Not.

They are also advocating a 3-cent increase in the gas tax. Apparently they do not represent gas stations.

13 comments:

Chet said...

Since Britt and Paris don't live in Michigan, it is unlikely to hurt them.

Communications guru said...

That’s true, but I’m sure they have more than one home. There are plenty of hot night spots right here in Michigan for them to show up at, and they may not be able to get their dog shampooed here because the 2-penny tax on that service. Besides, there are some 300-400 trust fund babies in Michigan similar to Paris Hilton who will be devastated by this, and they may not be able to pay that extra $10 on the $495 it costs to train their little dogs. Doesn’t Dick DeVos have children?

Anonymous said...

I know of at LEAST one Brighton gal who drives to Birmingham for $400.00 hair salon appointments.
1. No hairdresser in Livingston County must be good enough for her.
2. She must have extra time on her hands to make a 1 1/2 hour drive each way.
3. Gas prices obviously do not concern her.
4. An additional $8.00 on her bill shouldn't bother her at all.

Communications guru said...

I agree. Something tells me she’s not going to curtail her hair appointment because of a 2-cent tax on the dollar. If she does, we can use her business here in Livingston County where she lives.

Bowne said...

People need to help people and not deprive them. The 2 cent investment will help all of us. There will be less people under duress. Cutting State Government further makes life more difficult for people without web access. Most governmental offices are turning to the Internet to help people access forms, etc. What about the people without it? Not everyone can get to the Library and the Library is not open 24 hours a day. Internet accesss costs jobs too, more IT staff are needed to do this work. That said, there are less staff answering telephones or at front desks. Stress among remaining staff increases. State Representatives like Chris Ward do not understand real life stress of workers and the general public. Chris is insulated from everyday life struggles.

Republican Michigander said...

Granholm doesn't understand real life either as this tax increase will put a lot of small businesses - out of business. Let's send more jobs out of here.

Communications guru said...

Thanks for posting, Bowne. I agree. The governor has made state government do more with less since she took office, and we have less state employees now than we did in 1973 but more people.
That’s why we are progressives: we want to move forward, and people like dan want to turn the clock back.

Communications guru said...

Wrong. What are you basing that myth on? Like Bill Gates said, “21st century businesses are far more sensitive to the quality of talent in a location than they are about tax incentives."

Chet said...

If you're going to tax services, tax them at the same rate as everything else. There's either a moral or practical reason we don't tax services, or there isn't and we're picking winners and losers (although there is a moral reason to resist any tax increase including services because of the "tax-creep" I mention next). 2 cents seems like a hodgepodge solution - tailored to the amount JG needs to cover. The problem with such small increments is it is the same as boiling a frog - the next time more money is needed, it will creep up again - and again (we've been boiled enough times now to know though). The Chamber of Commerce proposal last year which broadened the tax (equally) and reduced everyone's tax to 5.5%, was fairer, and would have covered the whole SBT (but not now with the Governor's dirty secreting away of a .8 billion dollar shortfall which she hid DURING AN ELECTION so we couldn't make informed decisions (or, like, even have others, including moderates and Dems, propose alternatives and have more time to plan) -- that alone gives a guy like Leon the right to talk about (its not at a serious stage yet, and shouldn't until more is seen) recalls. But if we're talking increasing sales taxes - why not just take the final leap and go to the Michigan "Fairtax" proposal of a single-10% sales tax that eliminates income tax (and consider, for the individual, that plus the current 6%, is roughly equal), SBT, personal property, and all statewide taxes, and gives everyone a pre-rebate based that covers the tax-rate for the poverty level (or higher if you want to be more progressive). I not sure I support either the Chamber or Fairtax, but once you go down the sales tax road, you might as well consider it.

liberals Hate America said...

1st the Liberals want to raise the minimum wage on small business, now a added tax and the resulting paper work. When will it end? Michigan’s tax burden estimated at 10.8% of income and that ranks Michigan 16th highest nationally. It is basic economics 101, you spend only what you make.


Raising the minimum wage and the proposed tax on services not only would hit low-income families, but also would be burdensome for businesses -- both those who pay and those who collect the tax -- and generally bad for the state's economy. This new tax is to be added to business-to-business services also.

Guru you also fail as usual to tell the whole story, (Just your Rose Colored Liberal glasses world) which includes businesses headquartered outside Michigan, but operating here, would pay an additional $100 million annually. This should help bring Toyota to Michigan.

Sales taxes went up to 6 cents from 4 cents on the dollar to solve this same issue several years ago. Why did it not work? Answer Government is too big.

You promote a society that liberals (Communists such as yourself) picture as the ideal America, were the citizens are reliant on the government for their very existence. That the Constitution is a living breathing document that can be shaped by Liberal courts to further a Liberal agenda.

As America has moved away from organized labor in the past two and a half decades, the stock market has exploded, as have real estate prices, wages, and the number of people on non-farm payrolls. During this period, the average net worth of the citizenry has dramatically outpaced inflation while the standard of living improved across all social strata.

Of course, this makes socialists despondent, for the better off people are; the less they need to rely on government (this just scares the hell out of Liberals). On the fringes is: the battle to unionize Wal-Mart; another push for universal healthcare; the perennial goal of raising taxes; the jealous desire to limit the pay of CEOs, and; a Hugo Chavez-like call to strip the oil companies of their profits. Along with using global warming to scare the population into making financial sacrifices for the supposedly common good of the socialist Liberals.

Welcome to the new Democratic controlled United States.

Lets not forget supposed front-runner Hillary’s famous quote, The other day the oil companies recorded the highest profits in the history of the world. I want to take those profits. And I want to put them into a strategic energy fund that will begin to fund alternative smart energy, alternatives and technologies that will actually begin to move us in the direction of independence.






The first time capitalist principles lost out to socialist ones in the depths of the Great Depression, decades of budget deficits and exploding federal debt ensued that still threaten our financial solvency today, and our children's futures tomorrow.

In fact, two and a half decades since the start of the Reagan Revolution, the free market is once again under attack. If capitalists on both sides of the aisle don't take a stand to squelch this call for government to solve all of our problems, our children will be destined to live much more austerely than us, and become the first generation of Americans to be less successful than their parents.
In fact, it seems implausible that the left would have been as successful at the polls three months ago if candidates would have campaigned for: higher taxes; turning Wal-Mart into a union shop; creating universal healthcare; stripping oil company profits to create a strategic energy fund, and; imposing CO2 emissions caps on businesses that would raise prices on virtually all domestic goods and services.


The liberals know better than the citizens themselves how to best manage their own ways and means. Sound like Carl Marx to me.

Communications guru said...

“If you're going to tax services, tax them at the same rate as everything else.” That would be nice if you really meant it, but obviously you don’t. It’s going to be hard enough to pass a 2-cent tax on a growing segment of the economy that has never had to pay its fair share before, and you want six cents? That’s unrealistic, and I think you know that. There are actually idiots out there talking about recall over this.

It’s easy to cut taxes because it looks good on the resume, but now it’s time pay the piper for the 15 strait years of tax cuts and neglect. Tax cuts do not attracts businesses. It’s the services and quality of education in an area, and we are in danger of cutting those things. It takes a leader to stand up and say enough is enough. It’s very easy to get a tax cut approved, but it takes some courage to get things back in order again and pass a tax increase.

We have had “winners” for years, and it’s now time for the service-based economy to help. The only “tax creep” is down, and it’s very hard to stop it and almost impossible to reverse it to restore basic and essential services.

Where’s the proof of this ridiculous charge that the governor was “dirty secreting away of a .8 billion dollar shortfall which she hid DURING AN ELECTION?” Not true, and the annual estimating conference is when you find out how much revenues will be. Why is it that you have no problem with the Republic party’s irresponsible grandstand play during an election year of eliminating the SBT early with no replacement in sight?

You are completely wrong about Drolet’s recall scam. It’s a threat to do something before it even happens.

Communications guru said...

No, the liberals are not raising the minimum wage on small business, hates America. They are trying to help low income wage earners at least keep pace with inflation. Michigan does not have a high tax rare. The tax studies I referenced earlier show that Michigan is right in the middle at about 26 in reared to tax burden.

Of course the minimum wage will “hit low-income families.” It will help them, and it will help the economy by being pumped directly into the local economy. The fact is our economy is changing from a manufacturing-based economy to a service-based economy, and businesses that have escaped paying now have to start paying their fair share.

I have told the entire story. What does businesses headquartered outside Michigan have to do with anything? If you buy a widget in Ohio you pay the sales tax. I miss the significance of Toyota paying a 2-cent sales tax on services in Michigan.

No, the sales tax did not go up from 4 to 6 cents “to solve this same issue several years ago” It was increased as part of Proposal A that took the bulk of school funding from local property taxes to a statewide sales tax. I don’t know if you are intentionally trying to mislead or just uninformed.

The rest of your rant is just the same ole BS about liberals are evil, blah, blah, blah that I have heard so may times from you, and it wasn’t true them and it’s still not true now.

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