Friday, August 04, 2006

SBT Straw man

From the Michigan state house: State of Michigan Revenue: Source and Distribution

Few points:

  1. SBT is only something like 6.4% of total revenues. Thus both parties politicking over a tax that does not have a significant impact on total revenues. Based on graph, one would think that SBT isn't as big a 'job killer' as some say it is - but this depends on the business in question.
  2. However, if you look to the revenue for the gneral purpose fund, 1/4 of all monies comes from the SBT. This tells a different story from above. Now you see the fuss, and the issue of how to address the revenue/spending rammifications on this. However, SBT revenues do not go to education - so the argument that scrapping the SBT will gut education is not technically correct as SBT revenues are not allocated to the SAF (school aid fund).
  3. So there is a half empty/full opportunity. If the general fund was slashed by 25% while keeping funding for the other funds static, that would be great. However, it is the gereral fund where all the pork comes from, so I'm not optimistic that the legislature would show any fiscal discipline (see Congress for example).


At 9:19 PM, Blogger Taxbeaner said...

This truly is a moot point. At the time that they eliminate the SBT, the sources of funding will all be reworked to achieve current legislative priorities.


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