February 21, 2006

She's Got It ...

It's nice to see when politicians actually get it right. This is an excerpt from an interview that Michigan Governor Jennifer Granholm gave to the Lansing State Journal. This specific quote is the Governor's response to questions regarding the state's Single Business Tax.
Granholm: Our goal is to lower the rate, take the loopholes out, flatten the base, make it more profit-sensitive and less compensation-sensitive. And to do it without slashing public education and all - you know, the things that make the quality of life in Michigan.

I will look at anything that makes us more competitive. Everybody agrees we have to make the business taxes competitive. But I will not shift the burden to citizens ... everybody keeps talking about where are you going to shift this $1.9 billion hole (by ending the SBT). How do you shift it?

If you shift it by increasing the sales tax, then you are shifting business taxes to citizens. I'm not interested in that.
Not only does Governor Granholm understand the basic premise of sound tax policy - broad base with low rates - but also the need to offset lost revenue due to tax cuts and that cutting one specific tax while maintaining a current level of services must result in raising another tax which in turn shifts the burden from one set of taxpayers to another.


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