Advocacy News – October 19, 2021
The Michigan Chamber of Commerce today voiced its strong opposition on a slew of tax increases outlined in the U.S. House of Representatives Reconciliation proposal. President and CEO Rich Studley urged members of the Congressional delegation to consider the damaging effects the current Build Back Better Act (BBBA) will have on Michigan’s businesses and, in turn, the state’s economy, communities and families. The Michigan Chamber, in collaboration with our federal counterparts at the U.S. Chamber, intends to find a better, more effective path forward and make our opposition heard every step of the way.
Read the contents of the letter below:
“On behalf of the 5,000 businesses represented by the Michigan Chamber of Commerce, I write today to express my grave concern regarding the tax increases outlined in the Build Back Better Act (BBBA) before the U.S. House of Representatives Ways and Means Committee. As written, the legislation targets the backbone of our state’s economy by punishing businesses for their success and perseverance through a multitude of circumstances. The plethora of increases strewn through the legislation will each individually have a negative impact; however, these hikes collectively could crush our job providers.
The proposed tax corporate income tax increase significantly affects business owners and their employees no matter their tax bracket. Increasing the federal corporate income tax rate to 26.5% will result in a combined corporate rate from 25.7% to 32.3% in Michigan. As revenue directly equates to the ability to increase employment opportunities and income, the provisions within the BBBA will force job losses and result in lower wages for employees.
One of the most disappointing aspects of the House’s reconciliation proposal is its distinct emphasis on discouraging investments and impeding the cultivation of new ideas and a lifetime of diligence. For example, under the guise of taxing higher-income earners and larger corporations, the proposed language suggests increasing the capital gains rate from 20% to 25% – hindering economic growth and innovation as investments in our state’s smaller businesses will become scarce. In addition, the hike in rates will financially impact those who have carefully and dutifully invested in their communities and businesses over many years. This provision, like many others outlined in the legislation, will impact employees from entrance to retirement.
As we slowly start to come out of the pandemic, raising taxes will only increase the economic burden we are faced with and build barriers to growth for years to come. As reported by the Tax Foundation, the House proposed budget would impose the largest gross tax increase since President Lyndon Johnson’s tax hike to help fund the Vietnam War in 1968. Tax increases, especially of this magnitude, are not conducive to a recovering economy.
We stand in solidarity with the U.S. Chamber in highlighting the severity of the proposed tax increases on the businesses that build up not only Michigan, but our country, and ask that you help our job providers recover, not penalize and burden them further.”
If you would like to join the Michigan Chamber in making your voice heard, or have questions, please contact Leah Robinson at lrobinson@michamber.com for more information.