Politics & Government
5:27 pm
Tue November 27, 2012

Snyder administration proposes industrial tax phaseout

Governor Rick Snyder and Lieutenant Governor Brian Calley want the Legislature to enact a major tax overhaul before its current session ends in two or three weeks.

It would phase out Michigan’s tax on business and industrial equipment.   

It is widely agreed the tax discourages investment and is a particularly large burden on manufacturers.

The phase-out would take 10 years, with smaller businesses benefiting first.

Lieutenant Governor Calley said Michigan’s economy is still rooted in manufacturing.

“Eliminating this disincentive to invest will help improve our climate for job growth. Our whole state will benefit,” said Calley.

The holdup has come from local governments and school districts, which rely on that revenue.

David Lossing is the mayor of the city of Linden, near Flint, and president of the Michigan Municipal League. Lossing said there are still too many questions about this plan, and it could force many communities to cut services.

“We want to make 21st Century communities. We want to make these places where people want to live, want to shop, want to open a business, and so forth. If you throw us over the cliff, we’re not going to attract the businesses that we think we need to have to make us prosperous," said Lossing.

The plan would guarantee money for police, fire and other emergency services, but only if voters approve the plan in a statewide election. Other services could face cuts.

The state House Tax Policy Committee will hold a hearing on the proposal Wenesday.