House Passes Tax Increases
October 16, 2009
Also last week, the House passed and proposed a number of tax increases
that are intended to restore the some of the cuts that are included in
the budget bills. The one that has received the most attention thus far is a tax on physicians. The tax would charge doctors’ offices and other medical facilities a 3% tax based on their revenues.
Proponents of the tax which is called the Quality Assurance Assessment Program (QAAP) point out that the tax allows the state to get federal money to supplement those who treat Medicaid patients and for some physician’s will actually amount to a net increase.
However, those doctors who treat little or no Medicaid patients would only pay the tax.
The House passed the physician’s tax and a bill to freeze an increase in the personal income tax exemption that would otherwise take place next year.
Other bills that have been discussed in the House to raise more revenue include reductions in certain Michigan Business Tax Credits (what they would be has not been determined), an increase in taxes on certain tobacco products (not cigarettes), and increasing liquor license fees for bars to stay open later.
The Senate has said that they have little interest in passing these bills.
SBAM remains committed to our position that the budget should be balanced without tax increases, and then the legislature to look at structural reforms that will be needed to balance next year’s budget.