Pass the Service Tax, Don’t Pass the Service Tax: Just Keep Talking About It
California’s leaders are presently conspiring on how to fill the budget deficit by raising taxes while also clinging to a tenuous argument that they aren’t really raising taxes, but just changing the formula, shifting the tax burden.
California can learn from Michigan’s experience of passing – and then repealing – a service tax just hours after it took effect. The legislation would have put a 6% tax on a vast range of services including legal services, landscaping, janitorial services, manicures, warehousing and storage, investment services, and document preparation services. The legislature replaced it with a new Michigan Business Tax (MBT), a business income tax and a modified gross receipts tax.
And now, The Michigan Recalls Organization, in an effort that has been rife with allegations of fraud, has submitted 15,000 signatures in order to recall Andy Dillon, the Democratic speaker of the state house. The recall effort is to protest his support of the service tax and the new MBT.
Even without the myriad of problems faced by the Michigan legislation and its implementation, I, an independent political consultant – as well as my astrologist, beautician, and bodyguard to name a few – would rather not face the increased tax bill, serious competitive disadvantage, and administrative nightmare of a service tax in California. Unless, down the line, I might also be on the payroll of efforts to recall the tax’s supporters….