Replacing PPT revenue: Priceless

Added May 1st, 2012 by Gilda Z. Jacobs | Email This Entry Email This Entry
Gilda Z. Jacobs
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One thing most of us can agree upon is that good jobs are the key to Michigan’s economic recovery.

As a former local government leader —  I served on the Huntington Woods City Commission and the Oakland County Board of Commissioners —  I’m alarmed at the proposal to dramatically reduce the Personal Property Tax on businesses, which helps pay for public safety, education and other local services.

The plan is a wolf in sheep’s clothing, threatening to kill jobs even as it bills itself as a job creator. The PPT changes will pare an additional $470 million in business tax revenues. This comes on the heels of the $1.6 billion tax shift from businesses to individuals in last year’s business tax reform.

Without full replacement revenue from the business community, we’re looking at a loss of jobs as the ranks of firefighters, police and teachers are reduced. The intended or unintended consequences are that this tax cut will impact our local governments, schools and the quality of life we enjoy. Our communities will suffer. (See our report on the PPT.)

In my current position as the president & CEO of the League, I’m worried about how these policy changes will impact Michigan’s overall tax structure. The League supports changes to the tax structure that ensure tax equity. This business tax cut is not good tax policy for our state. This plan gives another large tax break to businesses while tuition is raised, our classrooms are overcrowded, and our public safety is weakened.

The theory behind this tax cut is to encourage job creation. An ordinary consumer is far more of a job creator than another business tax cut. When people have more dollars in their pocket because they are not paying additional taxes, they will spend more money in their communities. This translates into more jobs.

Let’s put jobs and our economy first. Businesses use services and they should help pay for them. Every business owner I know fully expects a police car or fire engine to show up if they dial 9-1-1. If the PPT is a bad tax, let’s find a way to replace that revenue from the business community in an equitable way.

 — Gilda Z. Jacobs

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