Government Efficiency – the ever and always elusive goal

by | Feb 11, 2015

State of Michigan Attempts To Optimize Tax Payments and Causes Significant Additional Burden on Michigan Businesses

Occasionally someone will ask me why I’m so cynical about the ability of government to be efficient and/or execute a plan well. My answer is simple, because it never has been able to do so.

I fully understand that there is a necessary level of government if we want to live without anarchy yet I often find that people who don’t regularly deal with the government and the seeming lack of logic that flows from this bureaucracy have not clue how frustrating and costly the government makes our lives.

Case in point (for this week) is the State of Michigan.

Generally I find the State of Michigan to be reasonable from a personal perspective, although they are anything but when it comes to business. This year the state has MANDATED that businesses pay a number of our business taxes online through a web portal that the State of Michigan has setup for this purpose. On the surface this is a good idea and one that I think saves both businesses and the state money and time. Wait a moment though . . . here comes the problem.

The problem is, that in order to gain compliance, the State of Michigan has told businesses that if we do not pay these taxes through the new state web portal that our payments will not be recorded. This means we can’t mail or deliver our payments to the state in any fashion – all payments need to be made online.

Stupid meSo far, makes sense. Until this week when we went online to pay those taxes to the State of Michigan.

For the record we’ve been working on getting our account setup for the portal since last year and have been WAITING for the state to “approve” our account (which they setup on our behalf – ponder the logic??). After more than a month of waiting (nearly two months) our account was still “pending approval.” This means that, as of yesterday, we were not able to make any payments to the state. We have a few days prior to the payment deadline although now we are beginning to have a problem. What’s the problem? I’ll step you through it.

  1. The State of Michigan is requiring businesses to pay taxes online through the state web portal
  2. Businesses need to have an approved account to pay taxes online through the new state web portal.
  3. Many business accounts are “pending approval” from the State of Michigan (even though the State of Michigan setup those account and businesses simply had to confirm our information).
  4. Taxes are due in a matter of days.
  5. Busineses can not submit payment of the taxes to the State of Michigan in any other manner – meaning businesses can not mail in the money, they can’t deliver the money to the State Treasury, they have no way to pay the taxes due except through the state web portal.
  6. When we called the State of Michigan to report the problem and ask for a solution so that we can ensure the necessary tax payments are made on time we were told that the hold time would exceed the time that their offices would be open – therefore we could not talk to anyone at the state.

The idea of paying taxes through an online web portal is great! Unfortunately, by mandating that businesses pay those taxes online and then not providing the means to do so, the State of Michigan is costing businesses across the state time and money. In the past, we could make a payment by placing a check in the mail and simply allowing enough time for the payment to reach the state and be processed. The State of Michigan, in all of their wisdom, took that ability away from businesses this year and has failed to provide a means to make those payments.

The net result of this bureaucratic bumbling is simple:

  1. It has cost businesses time and money. 
  2. It has created a level of fear, uncertainty and doubt on behalf of businesses who can not pay their taxes within the limited scope provided by the state.
  3. It has potentially (and this has yet to play out as the deadline for payments has not yet past) placed Michigan businesses in default and subject to tax penalties due to no fault of their own.

One more shining example of a great idea that was botched by a government agency.

Oh, and the best part . . . there is NO ONE to help businesses out.

  • Businesses in Michigan now have responsibilities and no way to carry out those responsibilities.
  • Michigan businesses can be fined and hassled for non-compliance.

What will happen to the State of Michigan for botching this implementation and causing businesses to fail in the execution of their responsibilities? Nothing. No state workers or agencies will face consequences for their inaction and inability to perform.