LANSING – Although he planned to submit language to get the Michigan Fair Tax Proposal approved by the Board of State Canvassers at December’s meeting, Rep. Fulton Sheen (R- Plainwell) said on has held his submission until January to make sure he had the language “absolutely correct” before asking for approval by the board.

Now in its third draft, the Fair Tax proposal will ask voters to sign a petition that would create a ballot initiative to replace the Michigan Business Tax, the income tax and the personal property tax with an 8.58 percent sales tax on all goods.

Those who make less than the federal poverty level for a family of four, which is currently set at $25,000, would qualify for a prebate, which would come in the form of a monthly electronic transfer to offset the sales tax they’d pay for goods such as food and other necessary items, Sheen said.

The most recent draft of Sheen’s petition also creates a premiums tax of 1.1 percent on the insurance industry in order to align Michigan with most other state polices, he said.

Sheen said that far too often, Legislators rush the lawmaking process and end up correcting mistakes years down the road. In this case, he said, he wants to make sure voters can see exactly what they’re voting for when they sign the petition – that they can “kick the tires.”

After all, he said, he’s putting it in the voters’ hands because it’s clear to him that lawmakers probably wouldn’t follow through if it were left it up to them.

“The Legislature screwed everything else up, I’m sure they’d screw this up,” Sheen said.” “When the Legislature won’t listen, the people can. That’s why I’m putting this through a ballot proposal.”

Proponents of the “fair tax” say that it allows consumers to keep all of their pre-tax dollars and decide how to spend them, rather than getting taxed on their paychecks and then taxed again when they make purchases.

Sheen said that he thinks that by taking the confusion out of the taxation process, the state can actually generate more business.

“I expect this to spur the economy because we will have gone from the most complicated system (with the Single Business Tax) to the simplest system,” he said. “Nowhere else will it be as easy to start a business.”

He said he thinks he’s made his point with voters, especially with local governments, which are excited about the prospect of the guaranteed revenue sharing the fair tax would provide.

“This has tremendous grassroots support,” he said. “If only 25 percent of the cities, counties and townships decide to collect signatures for us, that’s thousands. We have an army of people.”

“We didn’t change a whole lot with the MBT other than the name. Right around the time we start collecting signatures, businesses are going to find out just how much they are going to have to pay and they aren’t going to like it.”

As for why this is the right year to change to a sales tax, Sheen said that bad times are ripe for transformation. “Significant change doesn’t occur in good or normal times. It only occurs when legislators’ backs are up against the walls, and we’re there. In 2008, things aren’t going to get better; by everyone’s estimate things are only going to get worse.

The Board of State Canvassers has yet to schedule its next meeting, but will meet on January 31 or later to accommodate the primary, according to Department of State officials.

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