The original proposed Constitutional language in 2007, as proposed by Representative Fulton Sheen can be found at the Michigan Legislature website.

The Michigan Fair Tax Association: Michiganders for the FAIRTAX website is located at http://www.mifairtax.org. The FAIRTAX establishes one rate for everyone; no more tax filings to the government. The FAIRTAX is considered a progressive tax, protecting the poor through a tax rebate on the necessities of life; no loopholes, therefore everyone pays the same rate on every purchase. Taxes will be shown on every sales receipt rather than hidden in the prices that are paid by the consumer.

With the FAIRTAX the tax rebate is often times called a “prebate” because it is paid to those that qualify on the necessities that you purchase every month even before you purchase them. Additionally, the prebate is only available to legal residents, so illegal immigrants will not qualify to receive reimbursements from the government on their purchases

The Michigan FAIRTAX will replace the Michigan Business Tax (MBT) and business to business transaction will no longer be taxed. Consumers throughout the state will likely see an immediate reduction in the cost of their retail goods on this point alone by about one fifth (20%) or higher. Quoting from How the MI FAIRTAX AFFECTS MICHIGAN EMPLOYERS: “Anything that goes into manufacturing or is necessary to performing a service is considered a business to business transaction. Thus, the attorney or accountant performing corporate work wouldn’t be taxed, but creating a will or doing an individual tax return would be. Only the final sale of a product or the final purchase of the service would be taxed. The Michigan FairTax would stop the double, triple, and cascading taxation which goes on all the time Michigan.” Orig.

Michigan FairTax FAQs (Orig)

Q: With Michigan’s bad economy is now the time to make a drastic change to the state tax code?
A: Michigan’s current woes are precisely the reasons why Michigan should lead the nation by adopting the MI FairTax. Many other states  including Florida, Texas, North Carolina, Tennessee, Wyoming, and Nevada all use sales tax as their primary source of revenue to pay for state services. All of their economies are doing substantially better than Michigan. In fact, some of those states are the most competitive and economically strongest in the nation.

Q: Won’t people think that the Michigan FairTax unfairly shifts the burden of taxation from businesses to the individual taxpayers of the state?
A: Businesses don’t pay taxes, people do. Businesses pass the taxes along to the consumers who purchase their goods and services. The higher business taxes are in Michigan the more difficult it is for businesses trying to operate in this state and be competitive. Michigan needs employers.

Q: Is it realistic to expect Michigan residents to support the Michigan FairTax when it seems to place a new tax on food and other necessities?
A: Consumers are already paying the taxes for all businesses in inflated prices. Even Food and Medical businesses currently pay income and business taxes which are embedded in today’s prices. The MI FairTax eliminates these hidden taxes.

Q: What exactly is the “pre-bate”?
A: To protect the poor, and to assure that no tax will be paid on necessities, the MI FairTax provides for a monthly electronic payment to every legal household in the amount of what the tax would be for purchases up to the poverty level based upon household size. This untaxes the poor and causes the MI FairTax to be progressive. Because of the prebate, a family of 4 spending $21,200/yr would have a 0% effective tax rate, and if the family spent $50,000 it would have a 5.6% tax rate, and so on up to the maximum of 9.75%. The prebate of the MI FairTax is like the personal exemption of the current income tax.

Q: How will this effect state government?
A: It will simplify tax collection, provide a more stable revenue and prevent the government from picking winners and losers. Politicians,  bureaucrats and lobbyists will no longer be able to manipulate the state tax code.

Q: How will this effect local government?
A: It will make all revenue sharing constitutional giving cities, townships, villages, and counties a number on which they can reliably plan their budget.

Q: Will the Michigan FairTax tax business-to-business transactions?
A: No! There will be no tax on any business purchases. Any tax on a business must be added to the price of the product being produced and this causes the product to be less competitive in the market place.

Learning More About the FairTax

• The Michigan FairTax Contact Sheet is located at http://mifairtax.org/Contact.htm
• The National FairTax Site is located at http://www.fairtax.org
• Wikipedia Entry “Americans for Fair Taxation” http://en.wikipedia.org/wiki/Americans_For_Fair_Taxation

The Original Video Presentation of Michigan Representative Fulton Sheen

“We are the only mid-western state that still has a personal property tax” -Hon. Rep. Fulton Sheen

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