Wednesday, September 06, 2006

Letter to the Editor: Single Business Tax Repeal Will Mean Higher Tuition

My buddy David Wishinsky, who is also a contributor to this blog, had a letter to the editor appear in the State News today linking the Republican repeal of Single Business Tax to higher tuition for college students. While Granholm has been working furiously to lower the costs of higher education, the Republican Legislature executed a plan to eliminate one fourth of our state's general fund ($1.9 billion in revenue), a policy supported by Dick DeVos.

While talking about the Single Business Tax (SBT), its important to keep a few things in mind. The SBT has been around for many years, even through Engler's tenure as Governor. Engler and the Republican Legislature never substantially restructured the tax while they were in power. More recently, it is rumored that Dick DeVos pulled the plug on plans to reform the SBT after he decided on his gubernatorial candidacy. By forcing Granholm to veto a full repeal, they can blame her for not dealing with the tax. In other words, the Republicans have been playing politics with our budget so that they can use it as a campaign issue.

The Republicans would have you believe that the Single Business Tax is the source of all of our economy's woes. This is simply untrue. By blaming our problems on the SBT, they can effectively tie the job losses in our state to our Governor to make her more vulnerable in an election. Our economy's problems are also not completely the fault of Bush's economic policies, as the Granholm campaign implies. The losses are felt everywhere, but they hit hardest because of what our manufacturing sector is going through. These manufacturing losses are due to a complex set of factors that a Governor, or even a President alone, does not have complete control over.

This isn't to say that the Single Business Tax is a "good" thing, and we must not allow the Republicans to portray us as liking the tax. We just want it to be dealt with responsibly. Their actions are not fiscally responsible.

The SBT is not desirable because it disproportionately taxes things like employee wages and health care, which reduces incentives for companies to locate in our state. A restructured tax should include incentives that reward companies that hire and invest in Michigan.

However, the Republican proposal would have eliminated the SBT entirely. Furthermore, they would not discuss where the replacement revenue would come from until after the election. One fourth of Michigan's General Fund pays for a lot of things in our state. With a complete repeal of the SBT, it is highly likely that tax increases would be imposed on other taxpayers, or we would see significant cuts to things like public safety, education, and health care.

Contrary to what the Republicans would have you believe, the Governor (unlike Engler) acted to try and restructure the SBT with a plan outlined in her 2005 State of the State address. She did this by closing loopholes in the SBT that treated companies unequally, and by bringing taxes on insurance companies up to the national average. The Republicans were the ones to refuse this plan. By not agreeing to restructure the SBT back then, they secured a campaign issue for the 2006 cycle. It matters little to them that our entire state's budget is in jeopardy because of it.

Anyway, that's enough ranting from me. Here's the letter. Like all of David's material to newspapers around the state, it is on message with that of the Granholm campaign. More importantly, what he's saying is intellectually honest and is something that students like me can relate to. I think this letter is a great model for college students across Michigan to follow:
Every student at MSU can lament our tuition costs are high. The Republican-led legislature would like to see them higher; so would Republican gubernatorial-candidate Dick DeVos.

Why? Because corporations and businesses have been paying taxes for far too long. By repealing the Single Business Tax, they would like to throw that burden on you and I: the students. They would love to see the $1.9 billion replaced by $1.9 billion that helps fund state universities and community colleges. Without this funding, MSU and every other school would be forced to pass the burden onto us: the students. Our tuition would undoubtedly rise.

DeVos never had to get a student loan, but many of us have and will in the future. We should not live a life of paying back ever-escalating debt because we are providing a tax break for Amway. Vote for Gov. Jennifer Granholm in November. She knows what it is like to be a student, she knows what it is like to work hard for things in life and she is working for us.


At 8:09 AM, Anonymous Zack Pohl said...

Great work, Nirmal.


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