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The Governor’s “Grand Bargain”

January 9, 2010

In her year-end press conference last month, Gov. Granholm discussed the challenges that the state faces in the current year.  As part of this discussion, she broached the subject of tax and government reforms.

The Governor indicates that she is seeking a “grand bargain” on restructuring the state’s tax system.  While details of what this grand bargain would entail are scarce, the Governor has mentioned expanding the sales tax to services and lowering the current 6% rate. 

Governor Granholm defined the term grand bargain as where… “Everyone gives something; everyone gets something.  There’s pain all the way around.”

Some business groups have put forth plans for an expanded sales tax on services combined with spending reforms and re-structuring of the MBT, including elimination of the surcharge.  Speaker Andy Dillon has also been involved in such talks.

We at SBAM have been part of the coalition of business groups involved in these tax and spending reform discussions.  While we support elimination of the surcharge and business tax reforms that will make Michigan more competitive, we remain opposed to the idea of expanding the sales tax. 

To this end, we have a tax taskforce that has been looking at the various proposals and the “grand bargain” will be a point of emphasis at our upcoming Board meeting.

Rest assured that SBAM will be involved in these discussions and we will be looking out for the best interests of Michigan’s small businesses.

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