State Rep. Fulton Sheen of the 88th Dstrict in Allesgan County was the guest speaker Monday of the Economic Club of Lapeer County.

State Rep. Fulton J. Sheen, R-Allegan, of the 88th District, addressed Economic Club of Lapeer County members at the Monday luncheon held at Lenny Miller's restaurant in Dryden.

"We need to change the way we do business in Michigan," Sheen said. "We need a new tax policy. We don't need to tweak the one we have."

The current system is driving businesses and people away from Michigan, he said.

"The definition of insanity is doing something that doesn't work, over and over again, and expecting it to work," Sheen said. "Lansing is six square miles surrounded by reality."

In the current system, companies that suffer a loss are still unfairly taxed though a gross receipt tax, he added.

"If a little plastics factory suffered a $180,000 loss, they would still have to pay taxes on their gross receipts," Sheen said. "General Motors lost $39 billion last year. They paid taxes on their gross receipts."

If adopted, the Michigan Fair Tax would eliminate the 4.35% Michigan income tax and Michigan business taxes. It replaces these taxes with a 9.5% sales tax on all consumer purchases of goods and services, but not business to business transactions."

The proposal exports a greater portion of tax burdens to non residents who travel and vacation in Michigan.

"We're not a travel through state," Sheen said. "When you come to Michigan it's part of your plan."

There's a large underground cash economy in the state that could be paying their fair share, Sheen added.

"We have an illegal alien problem as well that's not paying any taxes," Sheen said. "If you live here, you will be taxed on what you buy."

If adopted, the Michigan Fair Tax Proposal would completely replace the Single Business, Personal Property. 6 mill business School Education and Michigan income taxes with a single sales tax, he said.

"As a result, you would only pay tax on the final purchase," Sheen said. "All business-to-business transactions would be exempt. Michigan citizens make nearly all their purchases with after-tax dollars."

The tax proposal doesn't allow any other statewide tax to be restored, enacted or increased without a vote of the people, and would guarantee revenue for counties, townships, cities and villages, said Sheen.

The tax wouldn't cause the poor to pay any more taxes than they currently pay, because of a rebate of their sales tax in a manner similar to the personal exemption from the income tax, said Sheen.

In the plan, citizens would receive a monthly rebate to offset additional items such as food and services which would now be taxed. A single Michigan citizen would receive $1,014 -- 9.75% of $10,400 -- the rebate would increase as it does now with the number of adults and children. A family of four earning $28,000 would pay no tax. Someone who earns minimum wage would pay little or no taxes.

People who have or make more money will purchase more items and will pay more taxes. If that same family of four made $60,000 they would not be spending $28,000 on necessities.

Fulton hopes to gather more than 380,000 registered voter signatures required to put the proposal of the November ballot. For more information, visit www.fultonsheen.us or www.mifairtax.org.

Michigan State University Athletic Director Mark Hollis is scheduled to address club members at the noon, Wednesday May 28 luncheon at the Lapeer Country Club. For more information, call Lapeer Development Corporation Executive Director Patricia Lucas at (810) 667-0080.

Susan Younger may be reached at (810) 664-0811, Ext. 8122 or susan.younger@lapeergroup.com.