Prop. 1 on the August 5th Primary ballot

[hamtown mike]

I have a lot of questions about Prop 1
If I built an addition on my house in 66, I would have paid taxes and fees to get it built, and I would have paid property tax on that addition ever year since. So why is it unfair for business to pay property tax, but not unfair for a homeowner?

Great perspective. So am I right in assuming that business owners cannot deprecate equipment in Michigan and pay taxes on the actual value? The 60 year old metal lathe that they keep talking about in the commercials would have more than likely outlived it's usefulness and be valued near nothing.

[motz]

Great perspective. So am I right in assuming that business owners cannot deprecate equipment in Michigan and pay taxes on the actual value? The 60 year old metal lathe that they keep talking about in the commercials would have more than likely outlived it's usefulness and be valued near nothing.

If their example existed in the real world, though, the business would get rid of that obsolete technology and use something better suited for the job rather than hanging on to relics.

[Jimaz]

Daily Kos: Michigan Proposal 1

So, what is Proposal 1? And what does it do? Follow me [below] for what I've found out.

The comments are interesting too. It seems everyone finds it worded vaguely. That makes it highly suspicious, IMHO.

Could it be that if voters reject it, they'll just go ahead and do it anyway? That seems to be the prevailing attitude lately.

[Cincinnati_Kid]

This proposal was written by a guy who works for the Mackinac Center for Public Policy. As many know, this group is pro-business, pro-Republican, and conservative. So consider the source when deciding how to vote.

Additionally, the establishment of another "Authority" is troublesome & problematic. Authorities are run by appointed people, not by people who are voted in. Plus, there are no details on what the "Authority" will or won't be doing or what their powers will or won't be. Heck, the Authority isn't even mentioned in the ads supporting it. There's over $1 billion generated by the personal property tax. I don't think there will be enough use tax generated to cover this if the proposal passes. Besides, even if it does pass & business get the benefit of the tax cut, we've already seen that no extra jobs will be created & no savings will get passed onto consumers.

Once you said Pro Republican, I stopped reading.

[compn]

if this is such a great idea, why didnt the legislature just vote it in?

[Steve203]

<i>...if this is such a great idea, why didnt the legislature just vote it in?</i>

iirc, the structure of the use tax was set by a vote of the people as the structure is set in the state Constitution. Remember Engler's math double talk where he was promising a big property tax cut, in exchange for "only 2% increase in sales tax"? What the sales tax increase was was 2 percentage points, ie a 50% increase in tax rate, but he was depending on voters not being able to do the math.

Prop 1 restructures the use tax again, so that means it has to be approved by voters just like the increase from 4% to 6%.

Another thing thrown in is a prohibition on the money shuffling authority increasing taxes and a prohibition on an increase in use tax rate. The Authority doesn't have authority to raise taxes anyway, and an increase in the use tax rate would require another vote of the people, so those provisions have no function other than to get support from the people who blindly vote against any tax, any time, for any reason.

[1953]

Cities have been short changed long enough in Michigan. I'm voting no on this proposal because I don't believe that the revenue will be made up for cities on an ongoing basis, and I'm skeptical about another authority being created to handle this.

1953

[Zug]

Jimaz - Thanks for pointing out the existing thread [[which mine is now merged with).

jackie5275 - I guess I do understand it. I guess my thinking is clear. What I'm now confused about is why there's no organized opposition...

But at least it's settled...I'm definitely voting "no"

[Novine]

"Prop 1 restructures the use tax again, so that means it has to be approved by voters just like the increase from 4% to 6%. "

That's not correct. It has been pointed out in analysis done of the proposal that the claim in the ballot proposal language that there's a constitutional cap is wrong. If it passes, one has to wonder if that will open it up to legal challenges. CRC debunks the reasons that you gave about why a statewide vote is necessary. It's only necessary because the legislature created the bizarre statewide authority and because it didn't want to be held accountable for the changes in the tax system.

[Zug]

http://www.freep.com/article/2014080...ax-cuts-Prop-1

Key part:

The tax cut [to the business personal property tax], which was approved in late 2012, phases out the tax on manufacturing equipment between 2016 and 2023. Starting this year, it also removes the tax for smaller businesses owning commercial equipment with a cash value under $80,000.

If Prop 1 is OK’d, local governments would see the lost money fully replaced by a portion of Michigan’s 6% use tax on out-of-state purchases, lodging assessments and telecommunications. Manufacturers benefiting from the tax cut also would pay a new special assessment on industrial equipment estimated to be about 20% of their current personal property tax bill.

If the measure is defeated, the tax cuts will be halted — forcing legislators to return to the drawing board. Mayors and others fear that if Prop 1 fails, the Legislature will re-enact the tax cut without diverting replacement revenue to municipalities.

So, yeah...looks like even if Prop 1 is defeated, Republicans will do something. I still don't get how the paper can talk about diverting funds from the use tax without discussing what those funds are currently supporting...

[ABetterDetroit]

[QUOTE=Steve203;445877]<i>...if this is such a great idea, why didnt the legislature just vote it in?</i>

iirc, the structure of the use tax was set by a vote of the people as the structure is set in the state Constitution. Remember Engler's math double talk where he was promising a big property tax cut, in exchange for "only 2% increase

Engler even sucked at even being a tax cutting repub. Property taxes in Michigan are nothing but a slush fund for anything state and local governments want money for making our property values low and the rents high.
http://taxes.about.com/od/statetaxes...rst-states.htm

[Novine]

Proposal A increased the sales tax. The use tax is a separate tax.