Small Business Challenges in 2016
Dumping the dreaded Michigan Business Tax (MBT) and replacing it with the new, small business friendly, Corporate Income Tax is a major victory for small business. However, special interests are already looking for ways to “tweak” the tax and expand the base (spread the tax to small businesses not now required to pay the tax) and/or raise the rate in order to increase revenue. Some have even suggested that small business isn’t paying
its “fair share” because many do not pay the Corporate Income Tax – ignoring
the fact that they pay their business tax through the personal income tax. They
want to return to the MBT double taxation of small business profits. NFIB will
be on guard against efforts like these.
In 2015 the same untrue refrain that “small business isn’t paying its fair share” has been offered as justification for expanding the Corporate Income Tax to non C corporation businesses (mostly small business) in order to find funding for roads. To refute these myths about small business taxes, NFIB engaged the well renowned research firm of Anderson Economic Group to do a study that proves that small businesses is not only paying its fair share, they are paying MORE than double what larger businesses are paying under the CIT when tax credits from the old MBT are factored into the equation. See the study and conclusions HERE.
Corporate Income Tax rate from 6 percent to 11 percent in order to
increase road funding. Although road funding has already been increased in 2015, the petition drive is still active and the tax and spend crowd is making new plans for the extra money if the tax hike is successful. The labor unions are hiding behind a front group
they formed called “Citizens for Fair Taxes”. The group’s
plan is to conduct a petition drive to put the proposal before the
Legislature. The Legislature would then have 40 days to respond to the
proposal. With the current Republican control of the Legislature it is likely
that the proposal would be voted down or not acted on, in which case the
measure would go on the November 2016 ballot for voters to decide. If they
succeed with this proposal, Michigan will have one of the highest corporate
income tax rates in the country and the result will be less investment by
business and a subsequent loss of jobs and opportunity for Michigan’s working
families. NFIB will be working to defeat this proposal. Go HERE to
read more about this development.
NFIB supports the original Corporate Income Tax proposal that has been passed into law and we will fight efforts to raise the rate or change the tax into another monster like the MBT it replaced.