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Originally Posted by Lothos
where do you get that info from? you have to have businesses to tax and a stable economy to have a stable tax revenue.
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for the most part, businesses ride out the historical
annual swings in the economy.
if the tax was profit based, an accounting "loss" and/or one bad year can effectively wipe out the state's tax revenue. Since most of our government has to budget based on forecasts, and quite a bit of our government utilizes a 2 year budget it created issues, especially when the constitution mandated a balanced budget.
at the time that the SBT was implemented, much of the economy could be in the shitter, yet the Big 3, being headquarted here, and having much of their employment/infrastructure based here were riding out a year, or two's economic downswing, it provided a relatively stable tax base to forecast with.
I didnt' state that it was successful in it's implementation, only that it was one of the goals of the SBT.
My curiousity with this state's tax base centers around the future of the property tax system. Our very own "proposal A" was modelled on California's proposition 13, which, when combined with an economic downturn in California essentially bankrupted several counties, as well as caused severe budget issues for the state government.
To date, while property values have stagnated, we haven't seen actual statistical evidence of a HUGE loss in property values (yet). When we do, just about everyone will be appealing their property's assessed, and taxable values (this is more important when looked at from the commercial/industrial sector).
Once reduced on appeal (and most
full tribunals that have market value evidence prevail) it will permanently alter the property tax base in this state, since it can't be "rolled forward" when economic times improve due to the statutory constraints on the rate of increases for taxable value.
This will further have an impact on the competitiveness of someone attempting to establish a new business here, as purchases get uncapped, as well as new builds - however, a business that is long established is "capped" unless they improve the property. The result is, that new businesses will demand tax abatements to relocate to Michigan. (something that has already long been a problem)
(editor's note: the author is currently still a certified State of Michigan Level 3 Property tax assessor, even tho he hasn't signed an actual assessment roll in over 15 years)