MI Service tax plan good, but Sales Tax decrease needs "Reversed"

The Democrats are proposing implementing a service tax and lower the sales tax and the MBT tax a little.  To the latter, there will still be 50% of business paying with the other exempt from lobbying successfully.  Here is an article on the proposal and below you will find an exemplary counter to the plan, written by Eric Russell: 

http://www.inc.com/news/articles/200701/michtax.html

 

----- Original Message -----

From: Eric Russell

To: letters@detnews.com

Sent: Tuesday, November 24, 2009 3:16 PM

Subject: Letter to the Editor

Dear Editor, the Detroit News:

 

I applaud Rep. Alma Wheeler-Smith's ideas for reforming Michigan's serverly broken tax code.  In particular, I am happy to see that she stands for taxation of services, not just goods.  There is nothing inherently wrong with taxing services.  However, the components of her plan need to be "reversed."  That is, the sales tax should be slightly raised (and extended to services) and the income tax on individuals and businesses should be eliminated.  That is what the Michigan FairTax (www.mifairtax.org) proposes, and that is what Michigan so desperately needs at this time when businesses (and their jobs) are disappearing at an alarming rate from our State.  Taxing consumption is far more efficient and transparent than is taxation of income.  Besides, when you tax an activity, you get less of it.  We should not discourage people from working (or working more) or becoming entrepreneurs by taxing the fruit of their labor.  Under the Michigan FairTax, each family will have the sales tax exempted from their purchases up to the federal poverty level for their family size.  In this way, the Michigan FairTax is fair to everyone--including those with lower incomes.  It's time to eliminate Michigan income taxes and adopt a Michigan FairTax.

 

Sincerely,

Eric W. Russell

Commerce Twp., MI 48382

day/cell phone: 248-931-2339

There is nothing inherently wrong with taxing services.  However, the components of her plan need to be "reversed."  That is, the sales tax should be slightly raised (and extended to services) and the income tax on individuals and businesses should be eliminated.