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Business Review Western MI
Business Review Western MI
Chamber poll reflects biz tax frustrations
(2008-05-07)
(wgvu) - Chamber poll reflects biz tax frustrations

May 8, 2008

By Mark Sanchez
marks@mbusinessreview.com

New polling data provides backing to advocates of quickly altering the
new Michigan Business Tax that has triggered numerous complaints across
the state.

Nearly one-third of the respondents to the Michigan Chamber of Commerce
poll said their states tax burden more than doubled under the MBT and
more than one in 10 reported an increase of 300 percent or more.

While she concedes that respondents hit with a large tax increase are
more apt to voice their views, the state chamber's Tricia Kinley says
the polling data clearly points to a need for immediate changes.

The results makes the Michigan Chamber highly skeptical of MBT
supporters' assertion last year that seven out of 10 businesses in the
state would receive a net tax decrease.

This is just untenable, Kinley said of the increase businesses
have reported as they compute first-quarter tax bills.

The Legislature has got to mitigate this, she said.

At minimum, the Michigan Chamber wants legislators to kill a 21.99
percent surcharge on the MBT implemented late last year to replace a
much-despised tax on services.

In other poll results:
More than 60 percent of the 690 business responding said the MBT is
more complicated than its predecessor, the Single Business Tax;

77 percent said they are now worse off than under the SBT;
31 percent said they would delay or cancel wage and salary
increases;

24 percent said they would delay or cancel capital improvements;

15 percent would move an expansion or cancel a location in
Michigan;

14 percent would lay off employees.

The Michigan Chamber believes backers of the tax miscalculated its
impact on business, Kinley said. Complaints about the tax having been
coming from businesses in all sectors, though the commercial real estate
and construction industry have been particularly hard hit and vocal, she
said.

Commercial Realtors and developers have been battling the tax, as many
discover more than 200 percent hikes in tax bills.

Joshua Weiner, head of Meyer C. Weiner developers in Kalamazoo,
explained his concerns before a Republican-held town meeting in
Kalamazoo in April.

The governor said 77 percent of tax payers were winners in the
MBT, Weiner said. That 23 percent are losing far more than the 77
percent are gaining.

Al Rowe, broker at Re/Max Advantage in Kalamazoo agreed.

It's a double whammy because the real estate market's so
slow, he told the gathering.

Small business also is suffering from the changes, argued Shashin
Kothawala, owner of Crystal Car Wash in Kalamazoo, who recently
terminated six of his 20 employees in direct response to the MBT, he
said.

I've never done that before, Kothawala told legislators. We
want to (rejuvenate) our customer base, but we can't invest because
of the tax.

Much of the profit some companies report goes to paying down debt, he
said, adding that his taxes increased 400 to 500 percent.

Vacancy rates are going to go up. You're not going to get
financing to build new buildings. There'll be less investment,
Weiner added. We don't have a lot of time.

GOP lawmakers expect to attack the MBT this year.

There are going to be bills introduced, pledged state Rep. Tonya
Schuitmaker, a Republican from Lawton. I don't know if they will
answer (everything). Those bills are going to be bipartisan.

Kinley is hopeful that lawmakers will act, especially in light of
recent passage of tax breaks for moviemakers and an easing of
requirements to get tax breaks from the Michigan Economic Growth
Authority.

State Rep. John Proos's southwest legislative district extends to the
Indiana state line and he's worried businesses may jump it unless the
tax is changed.

Michigan can't operate in a vacuum of competition, the St.
Joseph Republican said. With today's technology and communications
advances, a business can exist anywhere. It's up to us as policy-
makers to identify what can make Michigan as competitive as
possible.

Associate editor Candace Beeke and staff writer Lynn Stevens
contributed to this story.
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