The Play Tax

While we are going to try and stay out of politics, we cannot pass this up.

Michigan Governor Jennifer Granholm has proposed a 6% "luxury tax" to be levied upon sports, concert, and movie tickets, as well as golfing, bowling, and health club memberships. The Legislature is expected to introduce a bill in the near future. This could bring in over $100 million per year to the state.

Every state, county and city is trying to provide more services with less money every year. While budgets grow every year, so do the number of services that are needed to be performed. Many of these same entities are forced to spend money on items or risk losing money in other areas. These unfunded mandates talk a toll on local budgets. The Federal level passes these onto the state. The state passes them onto the county and city.

The governing bodies at each level are always trying to find new avenues to collect tax revenue. Lotteries are a great source. Taxes on cigarettes or other “sin taxes” are also easy targets for any law-passing body. But these sources have already been hit up several times. New taxes sources have to be targeted. The search for new tax revenues crosses party lines.

It is easy to say cut service, but the political reality is that it is very hard to do and still get re-elected.

Given all this it looks like Michigan have found a tax candidate – Play.

The professional sports teams are already campaigning how this hurts working families and that this is a right to go. These arguments are weak. Most sports and concerts have already out priced most working families anyway. Maybe they should focus their appeal on the movie price increase. This is a bit closer to home for most.

This means for us that our cost of inventory may rise. I would expect other legislating bodies over the next few years to see how it goes in Michigan.

For more information – see the following

http://detroit.tigers.mlb.com/news/press_releases/press_release.jsp?ymd=20070615&content_id=2028136&vkey=pr_det&fext=.jsp&c_id=det

http://www.notickettax.com/

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