For a tax system to be "fair," it should levy taxes in a similar proportion of the tax base for all industries and for all size firms. This satisfies both "vertical" and "horizontal" equity, and encourages the most efficient use of economic resources. The results of this analysis clearly show a large variation in tax burdens as a percentage of the tax base for different industries within the sample period. The prime reason for this variation is the unequal use of the various special credits, deductions, etcetera by Michigan's industries. Some industries receive little tax reduction, while others receive a great deal. This result corresponds with the 1981 DMB study of the SBT and the 1984 Kalamazoo Chamber report. [37]

Because of the data limitations, this cannot be generalized across the cycle. However, it does indicate that the SBT may place a heavier burden on some industries than on others. Further analysis of the data from a complete economic cycle would answer that question.

The "Fairness" of SBT Burdens on Michigan Industries
For a tax system to be equitable and efficient, it must levy a similar proportionate burden for firms of different size and in different industries over the entire economic cycle. During the sample period, the tax burden ratios varied significantly, indicating that there may be a bias against some industries in the SBT caused by unequal use of special credits and deductions.