Michigan has become the poster child for government that believes all good things comes from taxing its citizens.
When things are bad, make them worse.It's amazing that so many people... and government officials(?)... believe that just the state government must continue to expand while the economy of the state shrinks. By some strange accounting logic, a $2 billion increase in the budget offset by a $440 million cost reduction is considered good management... and a reduction in government.
What seems to be the case is that some believe a reduction in the rate of increase is a reduction. What taxpayers want is an absolute year-to-year reduction in government spending. Cut the damn budget by 5% and learn to live with it.That's not going to happen in our lifetimes, however. So we get more taxes. The income tax may be burdensome, but it is understandable and relatively simple. The new service tax will be a source of anger, confusion, and [probably] avoidance.
The service tax problem is two-fold:When will Michigan government realize that taxes are real costs to real people and real businesses... not simply revenue enhancements to the state coffers?
- Many highly visible "services" are exempt.
- Unlike retail sales taxes which can be legally exempted between businesses as part of the final retail sales chain [manufacturer to wholesaler to retailer], business-to-business service [consulting or subcontracting] transactions apparently will be charged at every step of the way... taxing taxes so to speak. This aspect of the service tax has to be eliminated before the tax goes into effect or it will drive significant business out of Michigan.
..