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May 20, 2005SBT shift is the right thing to do
Opposing View:
BY TODD M. BENNINGTONGranholm's plan will hurt business By Norman G. Campbell The Single Business Tax, a true Michigan initiative, is one of the most anti-growth taxes on record. No other state in the nation punishes employers by taxing them for hiring more workers and expanding factories as Michigan does. Not only does Michigan tax profits made by the business, it also takes into account total payroll, employee benefits and capital investment and taxes that as well. Everyone recognizes the burden of such a tax, and the need for Michigan to shed its dire financial shape. Governor Granholm recognizes this problem. But in order to reduce the SBT, she must find other tax outlets. The state cannot afford to lose revenue with a nearly $1 billion budget deficit. Her plan would level the playing field so that Michigan's business taxes are assessed more fairly. I find myself in uncharted waters. I am at odds with my own Republican Party and the Michigan State Chamber of Commerce over this initiative. I support the Governor's proposal to reform the SBT. It has had a negative impact on manufacturing for 30 years. Frankly, when you compare jobs in the manufacturing sector versus other service sectors to be impacted by this tax shift, and you take into consideration the additional goods and services created in manufacturing versus other service industries, it is very obvious that this shift is not only the right thing to do, but long overdue. Those lobbying Michigan lawmakers to defeat this plan owe much of their existence to the very same manufacturers the SBT penalizes today. In 2000, Michigan manufacturers paid almost $800 million in SBT. In 2002, manufacturers paid $29.5 billion in real and personal property state taxes - the third highest rate in the country. That burden adds to our difficultly to compete abroad. Both issues must be addressed. Without our manufacturing base, we won't have to debate over who will be paying the tax base - the tax base will evaporate. Like many of my industry colleagues, I am tired of hearing how uncompetitive Michigan is for manufacturers. I am tired of ongoing job losses. I am tired of constant criticism from some Republican lawmakers who question our strategy to remain a viable manufacturer in Michigan versus many other states, especially southern states. The time for the Michigan Legislature to act is now. They have the power to help make Michigan the best state in the nation as a place to manufacture products. Todd M. Bennington is the Plant Manager for BorgWarner ETS and a member of the Cadillac Area Industrial Group
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