SEARCH BLOG: TAXES
So how have governments responded? Well, the State of Michigan is looking to increase taxes. Gee, what a surprise!
The idea is to now tax services in addition to sales. Get a haircut and pay a service tax. Get a leak repaired and pay a service tax. Will we have to pay a tax to have our taxes prepared? That would be a real kick in the head.
Just a couple of questions:
- Is the administrative cost of collecting, reporting and submitting these new taxes going to be absorbed by businesses?
- Is the additional tax paid by consumers going to be absorbed by their budgets?
The State believes it will not have to adjust its spending habits simply by putting more economic pressure on an already depressed economy. But that is pretty much the way government doesn't work all of the time.
Hey, I have an idea. How about a 6% sales tax on home sales. Oh, wait. Home sales are pretty much non-existent in Michigan, too. But in case a home is sold, how about a 6% sales tax and a 6% service tax (for agent services). That will fix the budget problems! After all, who could be a loser in that situation?
Rather than creating a whole new tax structure with whole new administrative burdens for both businesses and the state (don't you think there will be a whole new department just to administer this new tax?), perhaps a simple way is this:
Implement a two-year special, non-renewable, 1% increase in both the sales tax and income taxes. The government would have two years to work out a new budget and structure based on significant reductions in revenue (if the economy doesn't recover).Otherwise, last one out, turn off the lights.