The Single Business Tax has been a debate for over 20 years and is still the same. Our Republican leadership has had a great many opportunities to bring this system into parity, They have not. Al cares and will work to provide new legislation to resolve this quandary.

Historically, most states in their effort to be fair in taxation used a regressive form of taxing. This regressive form in reality penalizes business, as the tax application does not represent what the business is being taxed for. The regressive form taxed business for the assets that they acquired and used in the manufacture of the product that they sold.

The purpose of taxing business should not be about asset wealth and asset accumulation rather, that tax application Must be charged against the profit revenue generated or the Gross value of the total sale of goods produced.

Just as we have a sales tax for retail operations, so should we tax business based upon equally balanced methods that do not penalize an entity for growth, asset value or obtaining financial security and wealth.

Our state would save great sums of capital outlay through reduced paper costs, audit processes and verifications if we simply charged each and every business a flat rate tax of 1.0 percent of all sales. Regardless of whether or not, it was to end use consumers or to another OEM (Original Equipment Manufacturer), supplier or sub-contractor.

This would provide equality throughout the business chain, and would reduce non-value added costs associated with the regressive system currently in place. Further reporting costs would be reduced by 100 percent as the reporting company would calculate ALL sales and remit payment of 1.0% of ALL sales to the state. This would reduce the need of the state to have financial auditors verifying monthly, quarterly or annual tax submissions in efforts to confirm conformity. Verification would be performed through the annual tax report by the entity at year-end. A simple program modification to the program would automatically flag out of balance accounts and report to the auditor this condition.

To further these cost reduction means, the reporting entity would not be required to expend scarce financial resources that are not value added and further penalize the entity for growth and wealth earnings. This in and of itself will generate the needed desire for capital expenditures to re-invest and stimulate our states economical growth.

Each and every entity pays the same amount regardless of their size. By unofficial calculations this system would generate $1.4 billion or more depending upon gross sales within the state each year, in revenue to the state and would allow for more accurate forecasting as the potential tax collections would be tied to the state generated Gross State Product (GSP). For example, May 2002 Michigan Economic Report states our annual Gross State Product to be $325.4 billion dollars for year ending 2000. 325.4 multiplied by 1.0% would generate $3,254,000,000 billion dollars in revenue. The Single Business tax for Fiscal Year 2001, 2002 was $1,983,329,688. At just a flat 1.0% the state gains 1+ billion in revenue, reduces cost of doing business to businesses through simplified reporting, reduces the States requirement of verification, auditing processes and simplifies the tax process saving approximately $27 million in state expenditures per year, saving business on average 18% in accounting and reporting expenditures and creates parity in the taxing process.

I fully understand that many will argue with this baseline review, however, when parity is created, a tax process is simplified, an interested party will find that they will have a smaller role to play and will feel that they are losing.

This process creates Win / Win situations for every member in our State. When we have win / win, we create harmony, a unified position and support by consensus.

As I work through this process, I will be drafting legislation and writing various updates in support of this program. Upon election in November, I plan to have the legislative package ready to submit to the Senate in February of 2007.