Guard Against Attempts to Change the New Corporate Income Tax

Author: Charles Owens Date: October 16, 2015

Small Business Challenges in 2015

After more than 36 years of double taxation and punitive tax policy on small business, NFIB/Michigan was successful in leading the way to repeal the confiscatory Michigan Business Tax (MBT) and replace it with a flat rate Corporate Income Tax.

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.

A case in point is that gubernatorial candidate Mark Schauer claimed during his campaign for governor in 2014 that 95,000 small businesses were not paying taxes under the Corporate Income Tax. As any small business owner knows, that is because they are already paying their business tax under their personal income tax. Liberal tax and spenders believe that unless a small business owner pays twice on the same income they are not paying their "fair share". This kind of economic ignorance is behind efforts to double tax small business just as they were under the old Michigan Business Tax to finance big government spending.

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.

NFIB supports the original Corporate Income Tax proposal that has been passed into law and we will fight efforts to change the tax into another monster like the MBT it replaced.

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