taxes

Politics
3:10 pm
Wed May 25, 2011

Sweeping changes to Michigan's tax laws, will jobs follow?

It's official.

Governor Snyder has just signed "the most sweeping tax change in the state since 1994," according to the Associated Press:

It cuts overall business taxes by about $1 billion in the fiscal year starting Oct. 1 and $1.7 billion the following year and replaces the Michigan Business Tax with a 6 percent income tax on corporations with shareholders. Some of those companies will pay more, but most companies won't pay the tax.

In the Detroit Free Press, AFL-CIO President Mark Gaffney said the tax overhaul won't create jobs.

Gaffney questioned whether a small coffee shop owner who receives a tax cut would hire someone. He said that depends on more business, and more business depends on customers having more disposable income.

"I hate to think Michigan is going to be the next experiment in supply-side economics," he said. "There's a reason they call it trickle-down, it's a trickle."

The Governor's mantra has been that cutting taxes will lead to more jobs in Michigan.

When MPRN's Rick Pluta asked the Governor for empirical evidence how he knows lower taxes will lead to jobs, Snyder said, "It's basic economics in terms of cost structures. There was some polling done by the Small Business Association that actually went out and asked their members about what would you be doing with these resources and they got good feedback to say that a lot people would be looking at creating jobs."

The unemployment rate in Michigan stands at 10.2% right now - that number doesn't count the chronically unemployed - people who have fallen off the unemployment rolls.

Politics
5:33 pm
Fri May 20, 2011

Budget deal reduces dollars for redevelopment

The new budget deal struck this week between Governor Rick Snyder and Republican legislative leaders cuts the amount of money for redeveloping abandoned factories and preserving historic buildings.

The governor says the state won’t need to rely so much on targeted incentives in the future.

The new budget will zero out brownfield and historic preservation tax credits, and replace them with a new fund to offer economic development grants.

$50 million will be set aside for brownfields and historic preservation.

That’s $15 to $20 million dollars less than the state targets now.

But Governor Snyder says the state can do a better job of choosing projects "and hopefully make those dollars go farther than they are today."

Mark Morante, with the Michigan Economic Development Corporation, says the state will target only projects most likely to be completed.

In the past, many tax credits that were awarded went unclaimed. He also says the state won’t need to rely on incentives as much because tax changes will bring down the cost of doing business.

"With this six percent corporate income tax and roughly an 80 percent cut in corporate taxes in general, our job will be a little easier on that side of the table, so we will probably need less incentives," said Morante. 

Those tax reforms have been criticized as a tax shift onto individuals. But the governor and his Republican allies in the Legislature say that will be worth it if it creates new jobs.

Economy
11:51 am
Thu May 19, 2011

Governor Snyder to deal with bond ratings after budget

DETROIT (AP) - Michigan Gov. Rick Snyder says he plans a trip to New York to discuss the state's bond ratings.

Snyder told reporters following a speech in Detroit Thursday that he and top financial officials in his administration will make the trip after current negotiations over the state budget conclude.

As a new governor, Snyder says it's important to establish a good relationship with agencies that rate Michigan's bonds.

Snyder says he believes the agencies would look more favorably on a state with a "stable, thoughtful tax system," something the Republican former businessman says he has taken steps to achieve.

A top bond rating is a sign of sound fiscal practices and enables an entity to borrow money at the most favorable rate.

Commentary
11:01 am
Fri May 13, 2011

Now for the Hard Part

Well, Governor Rick Snyder pulled it off. Yesterday, the legislature passed his radical restructuring of the state tax system, agreeing to slash business taxes, eliminate tax credits and for the first time ever, to tax pensions.

The man who was supposed to be a political babe in the woods skillfully guided his agenda home. They will tell you he almost didn’t pull it off. Indeed, Lieutenant Governor Brian Calley had to break a tie vote in the senate to get the bill passed.

But to some extent, this was theater. While some Republicans were genuinely opposed, others were really opposed to being defeated when they run for re-election.

So the outcome was skillfully managed to allow some Senate  Republicans in swing districts to tell their constituents that they voted against Snyder’s plan. But were they really against it? Here’s a clue. When they took a second vote on whether to bypass the waiting period and have the bill take effect immediately, the Republicans unanimously voted to support the governor.

And now for the real test: Will it work? After the vote, the governor praised the legislature for, as he put it, “taking the bold actions necessary to put our state on the path to prosperity, and “paving the way for economic expansion.”

The contrast between Democrats and Republicans on this couldn’t be more stark.

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State Legislature
7:16 am
Fri May 13, 2011

Education funding deal tied to Senate vote?

Capitol Building, Lansing, Michigan
Matthileo Flicker

It appears a deal was struck between Republicans and Democrats in the state Senate in order for Governor Rick Snyder’s tax overhaul to be voted on yesterday by Democratic state Senators. Chris Christoff, Lansing Bureau Chief for the Detroit Free Press, reports:

A quiet deal from Senate Republicans to give public schools an extra $150 million next year helped smooth the way Thursday for the 20-19 Senate vote to cut business taxes by $1.7 billion, tax pensions and do away with many tax exemptions.

Senate Minority Leader Gretchen Whitmer, D-East Lansing, confirmed the GOP's offer. It came in exchange for all Democrats going on the record with their votes. If any had not voted, Lt. Gov. Brian Calley couldn't have voted to break a 19-19 tie. A 19-19 tie (the Senate has 38 members) is the only circumstance under which a lieutenant governor can vote…

The deal would lessen a Senate-approved cut to K-12 schools from $225 per pupil less than this year, to $75 per pupil less than this year.

In a piece yesterday on Mlive.com, Peter Luke also mentions a deal:

Preserving the 19-19 vote that allowed Calley to break the tie required all 12 Democrats to vote "no." If one had declined to vote, there's no tie and the measure would have failed.

Democrats agreed to all vote in exchange for a promise that a good chunk of the extra tax revenue anticipated for FY 2012 will mitigate cuts in K-12 education.

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Politics
6:48 am
Fri May 13, 2011

Snyder tax overhaul victory caps months of negotiations

Governor Rick Snyder (R)
Michigan Municipal League Flicrk

Governor Rick Snyder had to compromise along the way-- but approval of his tax reform package hands the governor a significant legislative victory. And, signing the bill will allow the governor to retire the signature issue of his election campaign.

Governor Snyder campaigned heavily on scrapping the complex and unpopular Michigan Business Tax and replacing it with a corporate profits tax. He took office saying fulfilling that promise would be part of an agenda of “relentless positive action.”

“So I believe we’re on a positive path to make that happen. It’s that old ‘relentless positive action.’ I think it’s a little bit contagious and I hope it is.”

His legislative win caps months of negotiations that often placed him at odds with Republicans who opposed extending the state income tax to pensions. He scaled back his original propose, and also relented on ending the earned income tax credit for working poor families. The governor says he’s still happy with the result and predicts it will help spur job creation.

But not enough to convince many Democrats, who intend to make this tax package an issue in legislative elections next year.

State Legislature
6:40 am
Tue May 10, 2011

State Senators to take up tax reform bill

Inside the Capitol Building, Lansing, Michigan
Cedar Bend Drive Flickr

A state Senate panel is scheduled to hold a hearing later today on Governor Rick Snyder’s tax reform proposal. The Associated press reports:

The Reforms, Restructuring and Reinventing Committee is scheduled to take testimony Tuesday on legislation that would cut overall business taxes and lead to taxes on certain types of retirement income.

The Republican-led House passed the main bill in the package by a 56-53 vote last month. The legislation will face a tough challenge in the GOP-led Senate because some Republicans already have come out against it.

Some Republicans are opposed to taxing retiree income and to measures that would delay lowering the state's personal income tax rate.

Democrats generally oppose the plan.

State Budget
6:42 am
Mon May 9, 2011

Snyder says tax reform and budget on track

Capitol Building, Lansing, Michigan
Matthileo Flickr

Governor Rick Snyder enters a critical week as he tries to sell his tax and budget plans to state lawmakers. The governor is still trying to build support from his fellow Republicans in the Legislature. There’s wide agreement on scrapping the Michigan Business Tax and switching to a corporate profits tax while giving most businesses a tax cut. But even a lot of Republicans are balking at a new tax on pensions as well as ending nearly two dozen tax breaks.

On the budget side, many lawmakers continue to push back against the size of cuts the governor’s suggested for to K-through-12 schools. But the governor says the work will get done on time:

“I just view it as part of the process. We did our proposal.  We get different feedback from the House and the Senate. There’s differing views in both of those houses, and we’re going to work through it and we’re on a path to get it done by May 31st.”

That’s the deadline the governor has set for finishing work on the budget and tax reforms.

A state Senate committee is expected to hold hearings and vote on the governor’s tax plan this week -- with a Senate floor vote as soon as Thursday.

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State Legislature
7:54 am
Wed May 4, 2011

Tax plan meets resistance in state Senate

Inside the Capitol Building, Lansing, Michigan
Cedar Bend Drive Flickr

Leaders in the Republican state Senate say they still have to wrangle more votes to get a sweeping tax-reform package passed.

Senate Majority Leader Randy Richardville says he will meet with Governor Rick Snyder and House Speaker Jase Bolger to update them on where the tax overhaul stands in the Senate.

"We want to be in sync. We're worked together as a team so far, and we want to continue to do that."

Even though Richardville has been able to work well with Snyder and Bolger on the tax reform package, it appears he is still meeting resistance to the deal from his fellow Senate Republicans. A handful of Republican senators have said they will not vote for the deal that includes a tax on future pensioners. Richardville says he will not make changes to the proposal as it was agreed upon and passed by the House. But he hopes to have enough votes to pass it through the Senate next week.

May 3rd election
4:32 pm
Tue May 3, 2011

Volunteers work to get out the vote in Grand Rapids

Lizbeth Espinoza and Michael Tuffelmire stop at laundromats, super markets, and food stands like this one to make sure people know about the election and to offer them a ride to the polls.
Lindsey Smith Michigan Radio

Voters in Grand Rapids and 5 surrounding cities are voting Tuesday on a millage increase to support expanded public transportation.

Lizbeth Espinoza and Michael Tuffelmire walk into small Mexican super market in the mostly-Hispanic Roosevelt Park neighborhood. Tuffelmire says many people here aren’t aware there are any other elections but the big one in November.

That's part of the reason they’re driving around a passenger van, picking up anyone who needs a ride to vote.

“I’m just trying to just, no matter what people want to vote, I’m trying to make easier access for them," Tuffelmire said.

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Politics
3:06 pm
Tue April 26, 2011

State of Michigan on unpaid taxes... "All excuses welcome"

A caterpillar ate all of his tax forms and disappeared into the night. What's your excuse?
screen grab from TV commercial

People and businesses that owe back taxes to the state of Michigan have until June 30th to pay up without paying fines and penalties.

There are potentially hundreds of thousands of people and businesses that owe the state unpaid taxes.

The state hopes to net $90 million dollars from the tax amnesty program. 

State Treasurer Andy Dillon says if you owe, now is a good time to pay:

"It doesn’t matter why you didn't pay your taxes – the penalties can be forgiven. And the penalties can be quite stiff. It depends on the tax that you’re talking about, but it can be as much as 25% of the liability that can be forgiven, and the sooner you pay it off, the sooner you stop paying interest on that obligation."

This is the third time since the 1980s the state’s offered amnesty to people and businesses with unpaid back taxes.

The program requires payment of all back taxes plus interest.

The amnesty program was approved by the Legislature last year to find some new revenue to help balance the budget.

The Michigan Tax Amnesty website declares "all excuses welcome."

Here's the program's TV spot:

Politics
1:00 pm
Fri April 22, 2011

A look at who wins, who loses under Snyder's budget proposal

Michigan State Representatives Pscholka (left) speaks with Rep. Mark Ouimet (center) and Gov. Rick Snyder.
Michigan House Republicans

(This story originally aired on Marketplace)

Across the country, states are weighing competing funding priorities as they work to close gaping budget deficits.

In Michigan, Republican Governor Rick Snyder isn’t just trying to erase $1.4 billion in red ink. He also wants to fundamentally remake the state’s tax code. Snyder says it’ll help reverse years of economic decline.

Re-writing the tax code

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Commentary
12:46 pm
Thu April 21, 2011

Scrooge and the Budget

What if the governor increased the amount of Michigan income tax I had to pay by ten dollars a week?  The truth is, I’d barely miss it, and if I went out to eat a little less often, I wouldn’t miss it at all.

I’m not anything close to rich, but fortunately, I manage to make an income adequate for my family’s needs, and don’t have any children who need to go to camp or college.

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Offbeat
5:09 pm
Mon April 18, 2011

Airport in Sturgis, Michigan flooded by callers seeking tax advice

Search for IRS in Google Maps and you find the airport in Sturgis, Michigan.
Google Maps

Don't have the phone number? Just Google it.

That modern day phenomenon led callers seeking information from the Internal Revenue Service to accidentally dial a small airport in Sturgis, Michigan.

The FAA airport code for Kirsch Municipal Airport in Sturgis is "IRS."

If you type in a search for IRS on Google Maps, you'll get the airport's phone number.

Andrian Chen wrote about the mix-up on Gawker.com:

"The phone calls started two months ago, and it was just a trickle at first. Since then it's grown to a deluge of "20 to 50 calls a day" from people with tax questions, according to a weary-sounding office manager named Becky who took the time to talk to us this afternoon...

The calls haven't been a huge issue, Becky says, but she's getting sick of them. "It's just irritating," she said. "Most of them calling aren't the most intelligent, calling us at 7pm on the weekends. And it's like, do you seriously think the IRS is going to answer their phone at 7 on a Sunday?"

Becky will be glad when tax day ends at midnight tonight.

She may, or may not know, that if you need to file an extension, form 4868 is the paperwork you seek.

State Legislature
7:44 am
Wed April 13, 2011

Snyder, Republican leaders come to a tax deal

Governor Rick Snyder and Republican leaders in the state House and Senate have come to a tentative tax deal
Ifmuth Flickr

Governor Rick Snyder and Republican leaders in the Legislature have struck a tentative bargain on tax reform and the state budget. The plan delays an October 1st income tax rollback and includes a compromise on taxing pensions.

Michigan is one of just a handful of states that does not tax pensions. The deal between Governor Snyder and GOP leaders would shield people 67 years old and older from a pension tax. The governor originally wanted to tax all pensions, but he says compromises were necessary. Governor Snyder:

“So it’s a transitional plan that I think addresses the shorter-term requirements while being structurally sound for the long term.”

The plan also calls for scrapping the complicated and unpopular Michigan Business Tax in favor of a corporate income tax. That’s part of an overall tax cut for most businesses to spur job creation.

The plan would eliminate the tax break for working poor families, but offer some new tax relief for low-income homeowners and renters.

The plan must still be approved by the House and the Senate.

Politics
4:57 pm
Mon April 11, 2011

Can the state tax medical marijuana?

(photo by Steve Carmody/Michigan Radio)

The state Treasury Department says medical marijuana cannot be taxed in Michigan without a change in the law. The medical marijuana law was enacted by voters in 2008. But the law is silent on the question of taxing medical marijuana dispensed by licensed clinics and caregivers.  

James Campbell is an accountant who asked for the opinion. He says the state has not been taxing dispensaries and caregivers. But Campbell says he could not be sure that wouldn’t change.

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Economy
11:02 am
Thu April 7, 2011

Happy 'Tax Freedom Day' Michigan

(photo by Steve Carmody/Michigan Radio)

Today is Michigan’s Tax Freedom Day. It’s the day when the average Michigander will have earned enough money to pay their local, state and federal taxes for the year.  That’s three weeks earlier than it used to be mainly because people are earning less money because of the recession. 

Kail Padgitt is with the Tax Foundation, which produces the annual Tax Freedom Day list. He says Michigan’s local and state taxes are higher than most other states.

 “But when we look at federal taxes…Michigan actually paid  a little less in federal taxes due to the (state’s) high unemployment...leading to lower income taxes …federal income taxes.”

Padgitt says as the nation’s economy improves, special federal tax breaks expire and more Michiganders find work, Michigan’s tax freedom day will shift back to the end of April or maybe the beginning of May.

Education
3:55 pm
Thu March 31, 2011

2 ex-Eastern Michigan University students may have used stolen IDs to file fradulent tax returns

Federal authorities investigate security breach at EMU
John-Morgan creative commons

Eastern Michigan University officials say two of its former student employees may have filed fake tax returns using other students’ personal information.

The two students were already under investigation for allegedly stealing 58 student records.

Walter Kraft is VP of communications for EMU. He says now six more students have come forward to say their personal information was stolen:

"Apparently what happened in this case is that the student records were used for the purpose of filing fraudulent tax returns in order for someone to obtain a tax return to which they were not entitled."

Kraft says EMU police and federal authorities are investigating the two former student employees, whose identities have not been released.

He says EMU already does background checks on student employees, and is looking to see what other steps can be taken to ensure this doesn’t happen again.

 Nearly 2,000 EMU students currently work for the university.

State Legislature
6:35 am
Thu March 31, 2011

The debate over social issues during a budget crunch

Captiol Building, Lansing, Michigan
Thetoad Flickr

Governor Rick Snyder says he wants controversial social questions to take a back seat to taxes and job-creation. He says to do otherwise could create intense debates that enflame passions and sideline his efforts to fix Michigan’s economy.

But that has not stopped some of his fellow Republicans in the Legislature. They say GOP control of state government makes this the moment to tackle controversies surrounding abortion, gun control, illegal immigration, and medical marijuana.

Governor Rick Snyder meets up with his inner nerd every morning as he checks an electronic application that reminds him how much time is left before the budget deadline he set for the Legislature—May 31st.:

 “All I have to do is turn on my iPad and it shows me how many days and hours are left, and how many seconds…”

Snyder says he is singularly focused on completing the budget before that time on his iPad runs out. He has proposed massive cuts and tax reforms that would affect the budget. He says right now that should be the focus of everyone’s energy at the state Capitol. He’s finding some people – including Republicans – disagree. State Senator Rick Jones is one of those Republicans:

 “My job is looking at other issues that concern Michiganders."

Jones says the Legislature is working very hard on Snyder’s budget proposals and goals. But he says that does not mean lawmakers cannot and should not also work on social issues. As chairman of the Senate Judiciary Committee he recently took up and voted on a controversial abortion bill that is already covered by federal law. And he sponsored a measure that would add rules to the use of medical marijuana. Jones:

“The issues we take up, are issues where I could walk into any coffee shop in my district and the vast majority agree that it’s something we need to address."

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State Legislature
6:38 am
Mon March 28, 2011

Lt. Gov says tax plan debate will continue through break

Lt. Gov. Brian Calley says negotations over the state budget will continue in Lansing even though lawmakers are on a two-week break
Ifmuth Flickr

State lawmakers have begun their two-week spring break, but many of them say they will still be in Lansing working on budget issues. That includes negotiating with Governor Rick Snyder on tax reforms.

Lieutenant Governor Brian Calley says he expects lawmakers to meet Governor Snyder’s May 31st deadline to complete work on the budget.

“Any time that we waste right now adds time on the back end, and we really owe all the constituencies who depend on state an answer before we get to the same type of timeframe that we’ve dealt with in the past. So, it’s not really fair to put these things off until fall or even late summer.”

Snyder has proposed a tax on pensions, a new corporate income tax to replace the Michigan Business Tax, and scaling back tax credits.

Calley told lawmakers that if they don’t like Snyder’s plan, they need to put something else on the table that will help end the budget deficit.

Republicans in the Senate are expected to unveil a plan that includes an expanded corporate income tax, and to hold off on taxing pensions.

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