Sheen is focused on Michigan's tax system

Position: State Representative
District: 88th (Plainwell, Kalamazoo)
Party: Republican
Committees: Tax Policy (chair), Insurance, Regulatory Reform, Family and Children Services

Background:
State Rep. Fulton Sheen was re-elected to a second term in the Michigan House to represent the 88th District in Allegan County in November 2004. He was elected Allegan County treasurer in 1996 and 2000, resigning his position in January 2003 to serve in the legislature.

After graduating with a bachelor of science degree in 1979 from Western Michigan University, Sheen owned FJS Enterprises from 1979 to 1991. In 1988 he became a licensed financial advisor and owns and operates a financial planning practice along with his wife, also a licensed advisor. In 1999 he became a Certified Financial Officer (CFO).

Sheen is active in many civic and business organizations, including National Federation of Independent Business, Michigan Leadership Council, Allegan County Strong Families/Safe Children Council, Court Appointed Special Advocate for the Child, U.S. Chamber of Commerce.

Sheen’s past civic positions include the Otsego Public School Blue Ribbon Task Force, Otsego Chamber of Commerce, National Association of County Treasurers and Financial Officers, National Taxation/Finance Committee, National Association of Counties and the Michigan Association of County Treasurers, where he served on the legislative and investment committees.

Michigan Retailer: How did you become involved in politics?

Sheen: As a small business owner, I’ve always been very involved in issues that affect my business and other small businesses—taxes, affordable health care.

At a White House Conference on Small Business, I came in contact with the National Federation of Independent Business and got involved with that organization and later joined its Leadership Council, which I’ve been on since 1995. Later I became county treasurer in Allegan County.

MR: What are your legislative priorities?

Sheen: My highest priority is to fix Michigan’s taxation system. Right now, the economies of most other states are headed upward and ours is not. When everyone is going in one direction and you’re not, it’s your fault.

I would also like to help Michigan fix its regulatory atmosphere in order to make it easier to do business.
When comparing the business climate state by state, the Tax Foundation ranks Michigan 50th, making Michigan dead last in competitiveness. This has to change in order to keep and attract new businesses.

I would also love to find ways to lower the cost of health care, especially in the area of consumer-oriented health care.

MR: Have you introduced any legislation in connection with health care expenses?

Sheen: Yes. One bill would give a tax break in a year when a person has a catastrophic health event. If you go beyond your yearly deductible, you wouldn’t have to pay tax on the dollars you spent that exceeded the deductible account.

Another bill I proposed would allow a basic health care insurance option, much like “PLPD” car insurance. It strips off all the mandates that drive up the cost of everyone’s insurance, because it’s better to have 80 percent of your needs covered than zero.

MR: What have you been working on with regard to the Single Business Tax?

Sheen: The House temporary tax relief plan would reduce taxes on personal property and the Single Business Tax. I’m also working on a permanent solution that might eliminate the SBT.

I’ll be putting out four or five different models to be reviewed. For example, one eliminates all of the SBT, another one eliminates personal property tax, another eliminates both, another one cuts each drastically, say, by 75 percent. We’re looking for a way to restructure our tax system to put Michigan back on the competitive map.

MR: Can you explain the so-called Fair Tax model the GOP has been considering?

Sheen: You’d get rid of the SBT, Michigan payroll taxes and personal income tax at the state level. You would then have a single sales tax—not on food or health care but all other end products (that is, excluding business-to-business transactions).

That would make Michigan the most attractive place in the nation to have or start a business, since there would be virtually no tax expense associated with doing business here.

MR: Typically, retailers don’t favor any system that increases sales tax, fearing that it would hurt sales and make retailers look like “bad guys” as the primary tax collectors. Could this concept be made more palatable to retailers?

Sheen: For one thing, the new tax would be expanded to include services as well, and that would soften the impact on retailers.
Everyone’s paycheck would immediately see an increase (since state taxes would not be deducted), which could actually spur spending.

It would also self-adjust, so that every time the state exceeded the budgeted revenue through sales tax collection, the tax rate would automatically be lowered to adjust, in half-percent increments. So if the state collects one-half percent more than the goal revenue, the tax rate drops by one-half percent.

That would prevent the tax from getting out of hand, and would let the system seek the appropriate level of tax to support the budget.

MR: Tell me about your philosophy of the relationship between government and business.

Sheen: Government doesn’t produce anything, it consumes. So the best way that government can help business is to simply get out of the way.

One of the problems in this state is all the regulatory hoops businesses have to jump through, which hampers our state being able to enjoy the growth other states are enjoying. Across the nation, you’re seeing regulations being reduced, taxes on businesses being reduced. Michigan needs to do that as well.

MR: What’s been the high point of your legislative career?

Sheen: The last six months. Being chair of the Tax Policy Committee has been a privilege. I’m in a position to make a difference in how all businesses, big and small, will be taxed.

As a financial advisor I’ve been instructing people in areas of taxation for 17 years, and as a county treasurer I dealt with municipal taxation. So I’m excited to be able to be so intricately involved in changing tax policies that haven’t been revised in decades.

Another piece of legislation I’m happy with is the Military Family Relief Fund. We’ve been able to deliver over $1 million to military families who have a husband or wife in Iraq or Afghanistan, and the family here is struggling because of the cut in pay they are taking to serve our country. It was funded through a check-off box on the income tax form.