The news that Chrysler Group LLC turned a $116 million profit in the last quarter, delighting employees along with many observers.
But it also exposes a flaw in Rick Snyder's plan to exempt most businesses from taxes.
Chrysler is an LLC and under Snyder's plan will not pay taxes on that profit.
All along, Rick Snyder has been telling people that the 95,000 businesses that won't pay taxes are "small businesses," implying they were Mom and Pop operations with a few employees. Chrysler hardly fits that image.
Snyder's boosters in the media have bought into that song and dance. The Detroit Free Press recently declared that it didn't matter because Chrysler didn't have any profits. Two weeks after that was written, Chrysler is projecting profits this year of $500 million. Time for a re-write, maybe?
Meanwhile, $500 million in tax-free profits for Chrysler is hardly a level playing field for the state's automakers since Ford and General Motors will both pay taxes on their profits.
The issue is not just Chrysler's unfair advantage over Ford and General Motors. If Chrysler is an LLC, what other large businesses are also LLCs, with millions in soon-to-be-untaxed profits, if Snyder has his way?
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