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HomeMy WebLinkAboutResolutions - 2004.03.31 - 27383REPORT (MISC. 104070) April 1, 2004 BY: General Government Committee, William R. Patterson, Chairperson IN RE: MR #04070 — BOARD OF COMMISSIONERS — OPPOSITION TO GOVERNOR'S PROPOSAL TO CONTINUE STATE ESTATE TAX To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: The General Government Committee, having reviewed Miscellaneous Resolution #04070 on March 22, 2004, reports with a recommendation that the resolution be adopted. Chairperson, on behalf of the General Government Committee, I move acceptance of the foregoing report. GENERAL GOVERNMENT COMMITTEE 1,4L, General Government Committee Vote: Motion carried on a roll call vote with Coulter voting no and Potter absent. Miscellaneous Resolution # 04 070 BY: Commissioner Bill Bullard, Jr., District #2 RE: Board of Commissioners - Opposition to Governor's Proposal to Continue State Estate Tax TO: Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: WHEREAS the estate tax is used to tax the transfer of wealth between individuals at the time of death of the benefactor. The estate tax is the government's only tax on accumulated wealth; and WHEREAS the Michigan Inheritance Tax was abolished and the Michigan Estate Tax was enacted for estates of persons who died after September 30, 1993; and WHEREAS since that time, Michigan's Estate Tax has been labeled a "pick up" tax which means that Michigan's Estate Tax equals the state death tax credit computed on the Federal Estate Tax Return (Form 706). This means that an Estate Tax liability is not increased by the "pick up" tax but it is a mechanism for sharing the Estate Tax liability between the federal and state governments; and WHEREAS a 10-year phase out of the Federal estate tax was enacted, which also included a five-year phase out of the state death tax credit. As a result, Michigan's estate tax is scheduled to expire on January 1, 2005, when the Federal credit expires - although revenue from the tax will be collected through FY 2004-05; and WHEREAS Governor Granholm and House Bill 4683, propose to break the link between the state and federal death taxes and establish a permanent eight (8%) percent Michigan estate tax rate, which would not be affected by the phase-out of the federal tax; and WHEREAS Governor Granholm's FY 2004-2005 Budget estimates that this change in the estate tax would generate an additional $94.4 million revenue that will be deposited into the Medicaid Benefits Trust Fund; and WHEREAS one of the misfortunes of the Estate Tax is that it often prevents some family businesses from passing from generation to generation because the tax burden on the estate forces the sale of the business or liquidation of some of its assets; and WHEREAS especially hard hit by the Estate Tax are family farms and non-farm family businesses - where the revenue yield from the estate of a family-owned business is a very small percentage of the total estate tax revenues - the burden on some of these estates can be excessive and contributes to the loss of farmland; and WHEREAS Governor Granholm's proposal does include exemptions for Estates under $1 million (increasing to $2 million in 2006) and family owned businesses, including farms; and -Tr y Commisisfoner Distriqt4 Ur_ Of AO ComOssioner D isificV# ommissioner Distrioe# ./Commiss, District /7 WHEREAS not only does this "death tax" penalize hard work, thrift and good husbandry of property -- it is harmful to the economy, shatters Michigan's tradition of family owned farms and contributes to the loss of prime cropland. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners hereby opposes Governor Granholm's proposal and any proposal to amend the Michigan Estate Tax to impose any tax on estates in Michigan that are not subject to a Federal Estate Tax. BE IT FURTHER RESOLVED that the Oakland County Board of Commissioners urges the Governor and the Michigan Legislature to continue in their efforts to seek proactive measures to address the State's budgetary challenges -- but not by levying a new Michigan Estate Tax - which would be harmful to Michigan's economy, families and farmland. BE IT FURTHER RESOLVED that the Oakland County Board of Commissioners requests the Oakland County Clerk to forward copies of this adopted resolution to Governor Granholm, the Michigan Delegation to the State Legislature, the Michigan Association of Counties and Oakland County's Legislative Lobbyists. Chairperson, we move the adoption of the foregoing Resolution. Commissioner Bill Bullard, Jr. District #2 j/h&fr_4 Commissioner District:2y issioner District # 4- MO) ;- Commissioner District # C-7\,_9t4X74-L- Nf\A;kAii AAVeV -1 " Inf/ ;144. AdrAcsovi / 141,Q Resolution #04070 March 4, 2004 The Chairperson referred the resolution to the General Government Committee. There were no objections. G. William Caddell, County Clerk Resolution #04070 April 1, 2004 Moved by Patterson supported by Long the resolution be adopted. Moved by Patterson supported by Suarez the General Government Committee Report be accepted. A sufficient majority having voted therefore, the report was accepted. Vote on resolution: AYES: Crawford, Douglas, Hatchett, Jamian, Knollenberg, KowaII, Law, Long, McMillin, Middleton, Moffitt, Moss, Palmer, Patterson, Potter, Rogers, Scott, Webster, Wilson, Bullard. (20) NAYS: Suarez, Zack, Coulter. (3) A sufficient majority having voted therefore, the resolution was adopted. lms NOT fen cum EXECUTIVE MN STATE OF MICHIGAN) COUNTY OF OAKLAND) I, G. William Caddell, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on April 1, 2004 with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal 9 the County of Oakland at Pontiac, Michigan this 1st day of April, 2004.