Ann Arbor, MI — Today, Rick Snyder released the third in a series of reform measures from his Top 10 Guiding Principles to Reinventing Michigan that addresses his plan to Reform Michigan’s Tax System. A business leader and former tax partner at Coopers & Lybrand, Rick is proposing to eliminate the Michigan Business Tax and replace it with a simple corporate income tax with a flat rate of 6% in order to jumpstart the economy. To view the proposal, click here.
“The MBT is crippling Michigan’s economic recovery. Our state is in need of more jobs and we can’t afford to continue to tie the hands of our job creators with an unfair and extremely complicated business tax. It’s time for a fair and simple solution that will put Michigan on a long-term path to economic prosperity and help restore our state’s reputation. As Governor, I will eliminate the worst business tax in the country and replace it with a simple and fair solution that reduces the tax burden by 1.5 billion dollars – a flat corporate income tax,” said Snyder. “We need elected officials that understand that policies shouldn’t made on behalf of maintaining the status quo or appeasing special interests, they need to be crafted in the best interest of the citizens. My plan to eliminate the MBT is a job creator and puts the ‘open for business’ sign back up.”
“I strongly believe we can eliminate the MBT and protect the quality of education and services if state government makes the structural reforms that have been put off for too long. In these tough economic times, government must learn to do more with less. My plan to bring a 21st century performance-based budget process called ‘Value For Money’ budgeting will ensure that state government is tying state funding to real results and gives taxpayers the best return for their investment. With an overall lower tax burden, we can also eliminate or draw down costly incentives. As this campaign continues, I will introduce more common sense solutions to our fiscal challenges and the poorly crafted policies that are holding our state back. With the right leadership in Lansing, we can reinvent Michigan and move into an era of innovation.”
Rick’s Plan To Eliminate The Michigan Business Tax (MBT)
Replacing the Michigan Business Tax with a flat corporate tax will reduce the state’s tax burden, stimulate the economy, and create jobs. Businesses should not have to navigate a complicated and unfair tax code that was written by politicians. Instead, they should be able to simply take their federal corporate taxable income and multiply it by a low single-digit rate. Rick Snyder proposes that the Michigan Business Tax (MBT) be replaced with a flat corporate income tax with a 6% rate – a simple solution that will amount to a tax cut of $1.5 billion.
Professional politicians created the current system. Politicians created the MBT based on last-minute revenue needs and to keep special interests satisfied. They included dozens of incentives, credits, and deductions – so called “tax expenditures” that unfairly favor some businesses over others.
The current tax system makes it difficult to do business in Michigan, costing our state jobs. The cost of doing business in Michigan is 2-4% higher to companies here than those in most other states. In today’s economy, 2-4% could mean the difference between being in the black or the red. Plus, the MBT puts homegrown businesses at a disadvantage – Grand Rapids’ Meritage Hospitality Group paid 569% of their taxable income; Bronner’s Christmas Wonderland in Frankenmuth experienced a 500% increase after the MBT passed; Ansara Brothers Real Estate in Farmington Hills saw a 492% increase; and an accountant in Southfield was faced with a 1,300% increase.
The remedy is a flat corporate tax of 6%. A flat corporate income tax of 6%, with a reasonable exclusion for small businesses, will amount to a $1.5 billion tax reduction on Michigan businesses – $1.5 billion more back in the hands of employers who will be able to invest in Michigan and hire unemployed workers. A Tax Foundation study shows that for every $1 reduction in corporate taxes, wages increase $2.50 over 5 years. Rick Snyder will put in place “Value for Money” budgeting and other reforms that decrease spending, while giving citizens the quality services they deserve.
Rick Snyder is the leader who can reform Michigan’s tax system. Replacing the MBT with a fair corporate income tax is a simple solution, but one that career politicians do not have the will not to implement. Rick Snyder knows that citizens and businesses create jobs, government doesn’t. He is the leader to get this job done.
To read his Value For Money Budgeting Proposal, click here.
To read his proposal to Reform the MEDC, click here.
Background On Rick Snyder
A proud, native Michigander, Rick is running for Governor because he believes it’s time for a leader with a strong entrepreneurial background to bring a fresh approach and take this state in a new direction.
Rick was born and raised in a 900 square foot home in Battle Creek, Michigan by his father, Dale, owner of a window cleaning business, and his mother, Helen. He studied at the University of Michigan, earning a Bachelor’s degree with high distinction in 1977, an MBA with distinction in 1979, and a JD in 1982—all by the age of 23. From 1982 to 1984, Rick served as an adjunct assistant professor of tax and accounting at the University of Michigan.
After graduation, Rick joined the tax department of Coopers & Lybrand, now PricewaterhouseCoopers, in Detroit, as a CPA and became a Partner within five years. In 1987, Rick married Sue Kerr of Dearborn, Michigan. Today, Rick and Sue reside in Ann Arbor with their 3.5 kids: Jeff, 20; Melissa, 17; Kelsey, 12; and Duggan, their 7-year-old dog.
From 1991 to 1997, Rick served as Executive Vice President—and then President and COO—of Gateway, Inc. During his tenure at Gateway, the company grew from a privately-held $600 million company with less than 1,000 employees, to a publicly-traded Fortune 500 company with revenues in excess of $6 billion and over 10,000 employees in the United States.
In 1997, Rick left Gateway and returned home to Michigan so that he could utilize his experience to reinvigorate the Michigan economy and raise his family here. He invested back into his home state by founding Avalon Investments, Inc., a venture-capital firm focused on new technology. Over three years, Avalon invested in 24 companies in Michigan and around the United States.
After a successful capital raise of $103 million, Rick co-founded Ardesta in 2000, becoming Chairman and CEO of one of the nation’s largest investment firms focused on micro and nanotechnology. Ardesta has eight companies spread across Michigan and the United States developing small technology products in fields ranging from life-science to clean tech. and communications.
In order to give back to his community, Rick served as founding Chairman of Ann Arbor SPARK, the economic development organization for the Ann Arbor region. In addition, Rick is currently active on the board of directors or advisory boards of several privately held companies and community and educational organizations, including The Henry Ford, The Nature Conservancy–Michigan Chapter, the New Economy Initiative, the Bank of Ann Arbor, and The University of Michigan. Previous boards included the Michigan Economic Development Corporation (Chair), and the Sphinx Organization. Rick is also a member of the Michigan Bar Association.
For more information about Rick Snyder, please visit www.rickformichigan.com.