Summary of School Finance Proposal
Ballot Plan
Taxes
Income Tax
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Statutory Plan.
6 Mills on Homesteads
24 Mills on Non-homesteads
1ZMills on Homesteads
24 Mills on Non-homesteads
Decreases rate from
4.6% to 4.4%.
Increases rate from
4.6% to 6.0%
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Increases the sales/use tax
rate from 4% to 6%.
Single Business Tax
No Increase; SBT rate will
remain at 2.35%
Increases from 2.35%
to 2.75%
Tobacco Products Tax
Cigarette tax increases by
50 cents/pack. Levies a new
tax on non-cigarette tobacco
products at 16% of
price.
Cigarette tax increases to 40
cents/pack and the other
tobacco tax will be 16% of the
wholesale wholesale price.
Interstate Telephone Tax
Subjects interstate and
international telephone calls
to the increased use tax rate
of 6%. 1-800-#$ and
WATS are exempt.
Subjects interstate and
international telephone calls
to the present use tax rate of
4%.
Personal Exemption on Income
Tax Return
No change. The personal
exemption will remain at
$2,100 per person.
Increases the personal
exemption from $2,100 to
$3,000 per person. Seniors
increase to $3,900.
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Real Estate Transfer Tax
A new state revenue stamp
will be required for all
property transfers ($20 for
every $1,000 in value or
2%).
A new state revenue stamp
will be required for all
property transfers ($10 for
every $1,000 in value or
1%).
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Prepared by Protec, Inc.
across the country, Michigan
has one of the lowest sales tax-
es around," said Mr. Epstein. "In
most states, the sales tax is 6 or
8 cents. In a place like New York
City (which has a 8-cent sales
tax), you feel like you're buying
the product twice."
If Michigan voters elect a 6
percent sales tax, which would
take effect in July, retail experts
say consumers will boost their
purchase of high-priced items
like cars, televisions and stereo
systems before the levy becomes
law.
For businesses, especially
such industries as real estate,
lending and home supplies, a
new 2 percent property transfer
tax would likely slow the pur-
chase of new and used homes,
said Robert Mattler, president
of Protec, Inc. in Southfield,
which specializes in analyzing
the equitable assessment of
property taxes.
"A transfer tax of 2 percent is
quite a sizeable bill," said Mr.
Mattler, a property tax attorney.
"If you're already paying a real
estate agent 6 percent commis-
sion for a home sale, and
another 2 percent is tacked on
to that, it can be awfully expen-
sive. That's definitely going to
slow down the real estate in-
dustry.
"And if you slow down the
real estate industry, that puts
construction jobs in jeopardy,
and it means people won't be
buying homes supplies like
smoke alarms, door bells and
alarm systems. The 1 percent
transfer tax isn't as onerous, but
it still hurts."
Mr. Mattler added that while
both plans allow for property tax
reductions, whether it be a
home or business, the plans
translate into smaller deduc-
tions on income tax statements.
Because of this, and other fac-
tors, Mr. Mattler labels the state
tax plan "a tax hike, instead of
a tax shift."
Meanwhile, at the federal lev-
el, Pat Gregory, director of tax-
ation for Follmer, Rudzewitz &
Co., a Jewish-owned, mid- sized
accounting firm with offices in
Southfield and Mt. Clemens,
said the tax plan offers a new 36
percent bracket which includes
married couples with taxable in-
comes after all deductions ex-
ceeding $140,000, heads of
households over $127,500 and
singles over $115,000.
"People will have to sit down
early and study the tax forms
and work out a strategy," said
Mr. Gregory. "But of the 116
million taxpayers out there,
roughly 1.2 percent will be
moved into higher brackets.
And as for new taxes on retirees,
they touch only the top 13 per-
cent."
Mr. Gregory added that busi-
nesses which plan to make fu-
ture tax deductions on such
items as travel expenses will
have to keep more careful
records when the new levies
take effect. "Some travel ex-
penses are now 100 percent de-
ductible, others are not," said
Mr. Gregory. "I would break
down meals, airline tickets, en-
tertainment, etc. in separate cat-
egories. It will be a lot easier to
figure out come tax time next
year."
As if new federal and state
taxes aren't enough, Detroit
Mayor Dennis Archer has pro-
posed an increase in entertain-
ment taxes in metro Detroit to
help fund cultural institutions
like the Detroit Institute of Arts.
The new tax, if enacted by vot-
ers, would not take effect until
later this year. ❑
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The profect is worth $120
million and is expected to take
two years to,complete. Balton
has appointed Solel Boneh In-
ternational as the main sub-
contractor for the project.