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E-M:/ A plan to replace the SBT with smarter green taxes



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Enviro-Mich message from jmgear <jmgear@acd.net>
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Here's some back-of-the-envelope figures I put together to show
that you could replace the entire SBT with green taxes applied
to commercial and industrial energy bills.  It would be more
efficient, encourage conservation, and discourage energy waste
and its environmental consequences.

Best of all, green taxes encourage help level the playing field a bit by reducing the tax on labor (the SBT is in large part a tax on employment) and shifting it over to energy use.
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You can raise $1,844,348,428 by putting

a) 0.018 (18 mills) per kWh on commercial and industrial electric rates,

plus

b) $1.25 per Mcf of nat gas delivered to commercial and industrial customers,

plus

c) .33 cents per gallon on all gasoline sold in Michigan, with a tax credit of $160 (482 gallons times .33 per gallon) to non-commercial users (assumed that 80% of all Michiganders would get the credit-- that is, that 20% of us don't own a vehicle).

Since all business taxes wind up being passed through to customers anyway, this should be a wash or an improvement (if you end up taxing business $1.8B but do it in a more efficient way, you get an overall improvement).

There would be grumbling about this tax, like there is grumbling about the SBT, but at least this tax would have the positive benefit of encouraging greater resource efficiency by business and industry.

Obviously, as conservation took hold, you would have to keep adjusting the rates to maintain the amount of revenue--but it simply means adjusting three numbers every quarter based on the budget figures.

Sources:


http://www.cis.state.mi.us/mpsc/electric/elecdata.htm gives the following data for electric usage in Michigan by businesses in 2004


4,450,894 (no. customers)
6,002,983,175 (revenue in $)
84,564,628 (MWh sales)
That's just electric to businesses.

This page http://tonto.eia.doe.gov/dnav/ng/ng_sum_lsum_dcu_SMI_a.htm gives natural gas consumption for 2004 (Mcf = million cubic feet.)
Commercial = 175,109
Industrial = 210,501
Vehicle Fuel = 355
(Total delivered nat gas = 880,901; I left out residential and gas used to produce electricity, which is taxed in that form.)


Michigan uses 482 gallons per capita, and the Census Bureau estimates for 2004 give our population as 10,112,620, so we'll call it 10M people at 482 gallons each for a total of 4,820,000,000 gallons of gas.

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