Taxes

Taxes
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• Dr. Dan Benishek’s viewpoint:

Dr. Benishek believes that higher taxes stifle economic growth and limit prosperity. Taxes are a “necessary evil” to address certain, but limited, societal needs. Dr. Benishek shares the view on taxes espoused by The Heritage Foundation in that “[t]axes should raise the revenue to fund necessary government operations in ways that cause the least possible economic damage.” [1]

In Congress, Dr. Benishek would support efforts to reform and simplify the existing tax code, and he would strongly oppose any proposals to increase taxes on wage earners, small businesses, investors, and other job creators. Dr. Benishek recognizes that no rational economist would advocate raising taxes during a recession. Accordingly, Dr. Benishek believes raising taxes now would be reckless and irresponsible, and that Congress should focus on tax reforms that would grow jobs and the economy.

• Quoting Dr. Dan Benishek:

“I believe strongly we need a simpler tax system and lower taxes. When asked about our existing tax structure, I note that we have an extremely complicated and unfair system, thanks to the gerry-rigging by Washington politicians.

I would be open to studying all sorts of tax simplification and tax reform proposals and, in that regard, I will look with an open mind at any simpler and lesser tax approach in Congress. Once we simplify the tax code, we should leave it alone. All the wrangling for loopholes and exceptions in Washington are a source of corruption.

I presume my opponent will attempt to distort my views on this topic as a way to distract voters from his undisputed record of supporting tax increases that rate among the largest in Michigan‟s history. That’s what career politicians like Gary McDowell typically do, and it‟s what Nancy Pelosi’s team is telling candidates to do in an effort to rescue Congressional Democrats from defeat on election day — but it will not deter me from speaking out.

Given the economic recession Northern Michigan and the rest of the country faces today, I do not believe there are any rational economists who favor raising taxes during this period. Therefore, I would strongly oppose allowing the 2001 and 2003 tax reductions to lapse, thereby creating the largest tax increase in history.”

• Do Not Allow the 2001 and 2003 Tax Cuts to Expire:

President Obama and Congress want to drastically raise taxes in January 2011, which would stifle the already anemic economic recovery and destroy job creation. The tax cuts passed in 2001 and 2003 must be extended for all individuals, businesses, and investors. Going forward, government spending must be cut so that taxes can be cut further. Allowing taxpayers to keep more of their money will contribute to further economic growth and job creation.

• Eliminate the Death Tax:

Congress should stick with current policy and permanently repeal the death tax once and for all. Abolishing this harmful tax will help spur economic recovery, put unemployed Americans back to work, and increase the long-term growth potential of the economy. Most importantly, repeal of the death tax would restore the American Dream — the idea that if you work hard and live a virtuous life, you can pass the fruits of your labor to succeeding generations of your family without fear that the government will take it away from you.

• Lower Income Taxes for Job-Creating Business — Especially Small Business:

At a combined government rate of 40 percent, the United States has the second highest corporate income tax rate in the world, which makes America unappealing in the competition for businesses and jobs. This rate must be reduced to attract business and create new jobs. Small business — the primary engine of job creation and economic growth — must be a central focus of tax reform.

• Fix Capital Depreciation Rules:

Businesses typically must deduct the cost of investments in new plants and equipment over a term of years. Shortening or eliminating the depreciation period would reduce the tax bias against business investment, thereby increasing business investment, competitiveness, and future wage growth through higher worker productivity.

• The Research and Development Tax Credit Should be Made Permanent:

Every year it comes up for renewal, and every year in late-fall Congress renews it. Companies making their R&D investment decisions never know in advance how those investments will be treated tax-wise. That uncertainty hampers investment.

• Liberate Seniors from Payroll Taxes:

As part of a broader effort to reform our out-of-control entitlement programs, seniors who wish to work into their retirement years should be freed from the burden of paying Social Security payroll taxes, and employers who are willing to hire and/or retain older workers should be exempt from paying the employer share of the payroll tax.

Candidate Gary McDowell on the Issues
Taxes

• Summary: Gary McDowell hasn’t met a tax he doesn’t want to hike:
  • Income Tax Increase (3.9%‐4.35%): $750+ million per year
  • Sales Tax on Services: $600+ million per year
  • MBT Surcharge (repeal of Services Tax): $600+ million per year
  • Trash Tax (21 cents to $7.50 per ton): $150 million per year
  • Physician Tax: $300 million per year
  • Real Estate Transfer Tax Increase: $42 million per year
  • Rental Car Tax (fully fund Pure Michigan): $13 million
  • Freeze Personal Exemption on Income Tax: $87 million over two years

• In October 2007, State Rep. Gary McDowell voted for a $1.35 billion tax package — among one of the largest in the history of Michigan — that raised the state income tax 11.5 percent and expanded the 6 percent sales tax to 23 new services.

The Detroit News reported, “Michiganians went to bed Sunday night with the state nearing its first government shutdown and awoke to a $1.35 billion tax hike, among the largest in state history. An 11.5 percent income tax increase and expansion of the 6 percent sales tax to a strange brew of services will close most of the $1.75 billion hole in the state budget year that began Monday.” [2] The article continued, “The tax on 23 new services — which will generate $725 million over a full year — means this state now taxes 49 services, according to Treasury. The state already taxes some services, including storage and auto leasing. That puts the state at 27th in the country in the number of services taxes, up from 36th, [State Treasurer Robert] Kleine said.” [3]

• On September 30, 2007, State Rep. Gary McDowell (D-Mich.) voted for H.B. 5194, to increase the state income tax from 3.9 percent to 4.35 percent. [4]

In a September 30, 2007 article, the Associated Press reported, “The Democrat-led House on Sunday passed a bill that would raise the state‟s income tax from the current 3.9 percent to 4.35 percent, sending the measure to the Republican-led Senate, where it faced a much tougher fight.” [5]

• On September 30, 2007, McDowell voted for H.B. 5198, to impose a 6 percent tax on a wide variety of services, including various personal services and a number of services used primarily by businesses. [6]

• McDowell called raising the income tax and expanding the sales tax the “right thing to do.”

A September 30, 2007 Detroit Free Press article reported, “I’m ready to do whatever’s necessary to keep the state moving forward,‟ said Rep. Gary McDowell, a Democrat who represents a Republican-leaning district in the Upper Peninsula. He said he is prepared to vote for increasing the income tax and expanding the sales tax. “I anguished over it. Nobody wants to raise taxes, especially me. But I know it’s the right thing to do.‟” [7]

• According to the Tax Foundation, the combination of the sales and income tax hike moves Michigan’s tax burden from 14th highest in the nation to 11th highest in the nation.

In an October 2, 2007 article, The Detroit News reported, “Another measure of tax burden is state and local taxes as a percentage of personal income, with the national average at about 11 percent. [State Treasurer Robert] Kleine [D-Mich.] said the new tax boosts mean Michigan edges up from slightly below 11 percent to slightly above 11 percent.” The article continued, “But the Tax Foundation in Washington, D.C., which tracks such data, takes a different view of Michigan‟s ranking. The combination of the sales and income tax hike now puts Michigan’s tax burden at 11th-highest in the nation, up from No. 14, the Institute says.” [8]