"Fair Tax" would replace state income...

"Fair Tax" would replace state income and business taxes

There are 233 comments on the WZZM Grand Rapids story from Oct 31, 2007, titled "Fair Tax" would replace state income and business taxes. In it, WZZM Grand Rapids reports that:

Wyoming - Instead of a service tax, a sales tax, an income tax and a business tax, a West Michigan lawmaker ways the state should just have a "Fair Tax". "We need to totally reform our tax structure," says ...

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“Taz say Hi”

Since: Jan 08

Holland,MI

#230 Jan 17, 2008
The present flat rate income tax is the fairest tax we have. At least it's not charged on other taxes. With gasoline, for example, the sales tax is computed and added after all the other taxes are added to the price of gasoline. Do any of you really want to pay 9.5% tax on the state and federal highway taxes? Not me!

Just think, one of the things that comes up every once in a while on the federal level is the idea of a flat rate income tax like we have in Michigan. And that is argued to be more equitable (a fancy way of saying fair) than the present graduated tax. And I thought the republicans in Michigan were against raising taxes? It's time to be careful what we ask for!

“Taz say Hi”

Since: Jan 08

Holland,MI

#231 Jan 17, 2008
Karen wrote:
What would stop the rich from spending their money out of the state such as buying their cars or other big purchases.
They'll still have to pay the sales tax on car, RV, and mobile home purchases when they go to reister them in the state just like they do now.

“Taz say Hi”

Since: Jan 08

Holland,MI

#232 Jan 17, 2008
Julie wrote:
My only concern is for the elderly who have already paid state income for their whole lives.
This would be a double burden for them.
I do think this is a great way to get the illegals "out of the shadows" to pay their fair share.
Most of the illegals are sending most of their money back to their families in Mexico. You would be giving them a raise.

“Taz say Hi”

Since: Jan 08

Holland,MI

#233 Jan 17, 2008
Jason wrote:
<quoted text>
Even if it generates the same amount of revenue for the state, it cleans up the tax code (lobbyists will hate that) and taxes the cash under the table society. Plus, the tax is only on new purchases. If I buy a used car it's not taxed since it was taxed when it was new. It gives me a chance to save some of my income before the state puts it's hand in my pocket. I'd love to see it on the state and national level.
That's funny. I could swear that I've had to pay sales tax on every used vehicle that I've ever bought. Oops, the poor person gets to pay more of his low income on tax.

“Taz say Hi”

Since: Jan 08

Holland,MI

#234 Jan 17, 2008
John wrote:
<quoted text>
Hey, Econ 101 -
Maybe you should have taken Econ 102, too! <g!>
The 9.5% Sales Tax is not all that UN-competitive with other states - some are lower, some are higher. But when you then factor in that all other State-imposed taxes are ZERO, Michigan is a Very Competitive State, indeed!
Check your last paystub - you'll see an instant 4.35% PAY RAISE the week this goes in to effect.
A SALES Tax is imposed on people making purchase WITHIN our state - Michigan cannot impose its Sales Tax on a Nevada resident, for example. This measure will not make our products UN-competitive; quite the other way around, actually!
When you figure out that the prices any business has to charge does not need to bear the cost of business taxation - and if we do this in 2008 when the competitive window is open just a crack - business will flock to Michigan to set up shop here!
When attracting Job Providers to our state, how competitive do you think that ZERO taxes would be? ZERO is a very hard number for ANYONE to compete with!
Anyone who thinks that Michigan does NOT desparately need that level of competitiveness has simply never read a newspaper, watched the news or talked with their neighbor!
4.35% raise. Well, let's see, if I make $500 per week, that'll be $21.75 increase. Wow, that's a big raise!

“Taz say Hi”

Since: Jan 08

Holland,MI

#235 Jan 17, 2008
Do any of you really trust these lawyer/politicians not to have their little wrinkles in there to ensure that they get more of our dollars than we think they will? And since when did any politician come up with something that will make it easier for citizens to keep a lid on them?
Tom

Portage, MI

#236 Apr 1, 2008
I am just now digging into the Fair Tax issue and am also a small business owner here in w.mich (25 employees.) I do not have all the answers and I understand the issue of price change. However, there are many hidden efforts and monies spent on taxes that unless you pay them you would not even think about.

The business "personal property tax" is a tax on your desks, files cabinets, computers, production equipment, fork lifts etc... that we pay every year to a local taxing authority. It would be similar to you paying a tax on all the items in your home/apt. It is baffling to me why an auditor measured my desk top which is a basic corner desk top with a 2 drawer filing cabinet under each side...but they tax the size of the surface! Please Help us! This is one reason companies look elsewhere other than Michigan.

The SBT/MBT debacle is another mess. The SBT was based on payroll including things like benefits. A company, under the SBT, payed taxes on its benefits payed to employees. The MBT is a ridiculous mystery and had exemptions for a few things like brass baby shoe businesses..what?? Throw in my CPA bill to calculate these things and it is a crazy burden on business. Please do not assume "The Man" is going to pocket the coin. Michigan is a burdensome state in which to do business.

Back to your pricing issue. Under the fair tax I think two things would happen: 1) Businesses would flourish both existing and new business coming into MI and 2) I would look at the Tax cost reduction as a way to improve our medical insurance for our employees. Would I lower pricing, maybe not but my employees and thousands more would have a more stable environment and a thriving employment environment to improve their job if they so desired
Saif wrote:
I love the idea of a fair tax. The issue is, however, what is to stop the businesses in Michigan from keeping their prices the same after the tax is implemented and taking a higher profit? Nothing.
What will the businesses in Michigan do with the extra income they bring in? Will they pass it along to the people that work for them? No, they will pass it along in the form of dividends to the stockholders.
So what would the end result be? More Michigan workers get screwed over in the deal. Sure the businesses see a short-term windfall, but if people in Michigan see huge inflation in prices from this tax, then they won't be buying goods like they used to.
They paint a rosy picture on the mifairtax.org site, and if all the things they propose were put in place, then it could actually be a benefit, but business, like government, is loathe to give up what they see as "free money."
The government wouldn't agree to the monthly or annual "prebate" and the businesses would not pass their cost savings to the consumer, nor would they pass the extra profit on to the workers.
Make it work- and make it work the way it is presented on the site, and I am for it. I am also a realist, and must approach the implementation of such an idea with great skepticism.
Tom

Portage, MI

#237 Apr 1, 2008
I totally agree on the state and fed taxes getting rolled into the Sales tax calculation is double taxation. It is wrong!

However, the benefits of the Tax change seem to out weigh the negatives. Please look at the tax change in its entirety and how it could change the business climate on MI and therefore, effect your income upwards.

I am leaning toward the Fair Tax but I am one who will be paying the most as I have 4 kids ages 5 - 11. Its crazy to think about the spending we will be going thru in the next 15 years!!

Also - Unintended consequences: 1) It helps the resale stores like Goodwill and others as those items will not be taxed! 2) We can not currently tax drug dealers, prostitutes etc... for their work but when they buy something!!! I love those ideas!!
Gentle Taz wrote:
The present flat rate income tax is the fairest tax we have. At least it's not charged on other taxes. With gasoline, for example, the sales tax is computed and added after all the other taxes are added to the price of gasoline. Do any of you really want to pay 9.5% tax on the state and federal highway taxes? Not me!
Just think, one of the things that comes up every once in a while on the federal level is the idea of a flat rate income tax like we have in Michigan. And that is argued to be more equitable (a fancy way of saying fair) than the present graduated tax. And I thought the republicans in Michigan were against raising taxes? It's time to be careful what we ask for!
Tom

Portage, MI

#238 Apr 1, 2008
Fully agree! Knowledge is power and knowing where and how much a tax is allows us to make accurate choices for ourselves and our families. I also like that the Fair Tax will only allow new taxes to be placed on us by a popular vote. That means the legislature can not increase a Sales Tax or create a new Income Tax in a "sleep-over weekend debacle" like the MBT process.
John wrote:
Alan Greenspan correctly told Congress a few years ago that "Businesses really pay no taxes. People pay taxes."
What I like about the Fair Tax idea is that it gets all of our taxes that we pay out into the open where we can see them instead of hiding 2/3 of them in the prices of everything we pay.
Let's get rid of this old archaic tax ystem that picks winners and losers!
Tom

Portage, MI

#239 Apr 1, 2008
I know there is a portion of the income collected that goes to family members back in their home country. However, if you suppose that an illegal is getting paid under the table then the income tax is not being taken out any way. The increase in the sales tax will atleast collect on their purchases here. That fact is true for all those who work outside the "system" and do not pay income tax whether they work in a legal or illegal job (drugs, prostitution, gambling etc...)
Gentle Taz wrote:
<quoted text>
Most of the illegals are sending most of their money back to their families in Mexico. You would be giving them a raise.
Tom

Portage, MI

#240 Apr 1, 2008
Pennies add up to Dollars.$21.75/week =$1,131.00/year. I do not know what you consider big but if you make $500/week thats like getting over 2 extra paychecks in a year.
Gentle Taz wrote:
<quoted text>
4.35% raise. Well, let's see, if I make $500 per week, that'll be $21.75 increase. Wow, that's a big raise!

“Dude, Where's my car?”

Since: Jan 08

Location hidden

#241 Apr 1, 2008
This is an old story and probably a dead issue anyway, but anytime I hear a politician talking about a "fair tax" I just instinctively grab a hold of my wallet and grasp it a little tighter.

“Taz say Hi”

Since: Jan 08

Holland,MI

#242 Apr 2, 2008
Hurley35 wrote:
This is an old story and probably a dead issue anyway, but anytime I hear a politician talking about a "fair tax" I just instinctively grab a hold of my wallet and grasp it a little tighter.
AMEN!!!

However, according to an earlier post, this is a dead issue anyway.

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