There’s One For You 19 For Me
It appears likely now, since last nights meeting of Michigan lawmakers, that Michigan’s sales tax will be extended to include many services. According to many business owners, this extension, which could go into effect this Saturday, would have a negative impact on their businesses and thus the Michigan economy as a whole — as if it isn’t struggling enough.
The adverse effects posed by this tax would especially be realized by owners of small businesses:
Taxing services in Michigan would have especially detrimental effects on small businesses, which routinely contract out for bookkeeping, accounting, office equipment repair, janitorial, legal, computer and a host of other service activities. A large competitor can often provide such things in-house, thereby avoiding a sales tax. This should concern us, since the lion’s share of new jobs are created by small businesses.
Ultimately this will be damaging to the citizens of Michigan, as the additional cost of these services — particularly those that people will continue to use despite higher costs — will be passed on to the consumer. Those services that are less essential to people, will suffer, and some will likely be forced to close.