'Ax the tax,' cry Michigan advisers

A growing opposition to Michigan’s new 6% tax on investment advice and — nearly two dozen other unrelated services — has spawned the Coalition to Ax the Tax. The group proposes replacing to the much-contested tax with a tax on campaign advertising. The coalition, represented by 16 business and consumer organizations including the Michigan Chamber of Commerce and the Small Business Association, will need to collect 300,000 signatures for a ballot initiative that would force the state legislature to either adopt the proposal or put it on the ballot for a statewide vote in 2008. In addition to advising services, the service taxes would also apply to such areas as astrology reading, escort services and ski lift ticketing. “Our alternative is less punitive,” said Henry Woloson, president of Security Financial Management in Clarkston, Mich. Attached to the proposal to tax campaign advertising is a proposal to convert the state legislature from full-time status to part-time, as is already the case in 40 other states. The tax, introduced after a late-night legislative session on Oct. 1, is expected to generate more than $600 million annually to help fill a $1.75 billion state budget deficit. The investment advice portion, which will likely only include non-discretionary financial advice, is expected to generate $16.8 million annually. The select service taxes, along with an increase in the state income tax, have also sparked petitions to recall Democratic Gov. Jennifer Granholm. The governor’s office refused to comment or to make the governor available for comment. The tax on investment advice is slated to go into effect Dec. 1.