The concept of "fairness" is difficult to quantify, but economists have generally accepted two measures that are reasonably quantifiable, and have economic justification. The first is known as "vertical equity," and refers to the relative tax burdens of taxpayers of different means. Taxes that take an increasing portion of income as income increases are commonly termed "progressive," while those taking a smaller portion are termed it regressive." Those that take the same fraction of income at every income level are termed "proportional."
The economic justification for vertical equity holds that the tax system should not penalize some taxpayers with higher rates simply because of different sized income (or value-added), and hence favor economic production of one group over another. While some have argued that the state should have a "progressive" tax system, this argument does not generally rely on economic reasoning. 
In the context of the Single Business Tax, vertical equity would refer to similarity in tax burden ratios as the size of the firm increased. Measuring this was a major goal of the 1985 Treasury report, which concluded that the relative SBT burden increased as firm size increased.  However, as this result was based on the use of an incorrect tax base, the true distribution of the relative SBT burden was not established.
The credits available to smaller businesses clearly make the SBT progressive. According to the Treasury, 60% of Michigan firms paid no SBT in the sample period 1980-81, primarily small firms. This nominal progressivity must be weighed against the larger administrative burden placed on smaller businesses. Given the considerable complexity of the SBT, the compliance burden is proportionately larger for smaller businesses than larger ones. Large businesses in general can spread the administrative costs of complying with government regulations, laws, and taxes across a larger profit base. Thus, the SBT tax liabilities are proportionately less burdensome for smaller businesses, while their compliance burdens are larger.
A major objective of this study is to determine "horizontal equity," or the equivalent treatment of taxpayers of equivalent size. Economic theory holds that, if certain industries earn a higher risk-adjusted after-tax return on investment, then resources will flow from other industries to that industry. In order to maintain the most efficient use of resources, and therefore encourage economic growth, the tax code should remain as neutral as possible among industries. In the context of this study of the SBT, a similar SBT burden among various industries would constitute "horizontal equity," or "fairness."
A related objective of this study, to determine whether the SBT favors business expansion in Michigan when compared with other state business taxation systems, relies on the same theoretical foundation: if Michigan's business tax burdens are higher than in other states, businesses have the incentive to relocate to other states.
There are other questions regarding the "fairness" of the SBT that economic theory cannot answer well. For example, the SBT, as a VAT, forces money-losing businesses to pay taxes during poor economic years. For those who favor income as a measure of "ability to pay," this makes a VAT "unfair." The underlying issue is the relationship of government to society: does government serve society, or vice versa? The SBT helps government stabilize its revenue stream, but at the expense of businesses.
The State's fiscal constraints and the power to tax affect this question. Michigan, like many states, operates under a requirement for a balanced budget. This limits its flexibility to borrow in order to finance expenditures in depressed economic times. On the other hand, the creation of "rainy day funds" allows a reserve against these situations, the balanced budget requirement allows exceptions, and the legislature can always take the expenditure-cutting and revenue-increasing steps to balance its budget. By putting businesses under a tax that increases their cyclical strain, the government is essentially forcing them to take the painful steps, in order to preserve its revenue stability.