Governor Whitmer came out today with her proposed budget which includes a small business tax and a 45-cent per gallon gas tax increase. Since the election has ended there has been continuous speculation on how the new administration would pay for a road funding increase, a repeal of the pension tax, and an increase to the school aid fund. Today we got our answers, and unfortunately it includes placing that cost directly on small businesses.
Under her new budget, Gov. Whitmer plans to increase K-12 funding by $507 million, increase road funding by $2 billion, and repeal the pension tax (which will cost the state budget $384 million) for a whopping total of almost $3 billion in increases in state government spending.
The business tax increase is being touted as a “business parity” tax which would expand Michigan’s Corporate Income Tax (CIT) to S-Corps and LLCs, increasing tax rates on small businesses from 4.25% to 6.00%. The work that was done in the past 8 years brought Michigan from one of the worst to one of the best in small business taxation. We cannot go back to the time where our state stepped on small business and paved the way to having the highest unemployment rate in the country.
We will continue to update you as this moves forward.