State Receives Good Marks for Tax Codes

Story from the Detroit Free Press

You may want to cover your ears. I am about to explode two dangerous myths.
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• The first: Michigan is a high business tax state.

• The second: We can cut business taxes without replacing the revenue they generate.

Neither could be further from the truth. And both make it harder to create jobs and promote economic growth in our state.

Those who argue our business taxes are high ignore the facts. When comparing how state tax laws affect economic performance, the nonpartisan Tax Foundation ranks Michigan 20th best in the country, ahead of most of our Midwestern neighbors.

Even with recent changes to Michigan's business tax structure, including implementation of the Michigan Business Tax and the MBT surcharge, which was developed and promoted by the business community, the Tax Foundation's State Business Tax Climate Index for 2009 shows Michigan has a "more favorable" tax system for businesses than in previous years.

The myth that Michigan is a high business tax state is sustained by politics, not facts. It has been perpetuated throughout Gov. Jennifer Granholm's tenure by her critics, who never stop to explain how the business tax structure she inherited from her Republican predecessor and the Republican Legislature he dominated became completely oppressive the moment she took the oath of office.

"When comparing how state tax laws affect economic performance,
the nonpartisan Tax Foundation ranks Michigan 20th best in the
country, ahead of most of our Midwestern neighbors"

Since then, the myth has had an almost constant companion in the notion that we can reduce business tax revenues without sacrificing the things that all of us -- including the business community -- want. Businesses and families will choose to come to Michigan or stay here because we offer good schools, good jobs, access to health care, and safe communities in which to live, work and raise a family.

To find that balance, the governor has done more to reduce state spending than any governor before her. Michigan's general fund expenditures dropped by 7% between 2001 and 2007, the largest decline of any state, according to the National Association of State Budget Officers. And total state expenditures rose the least of any state. State government is also much smaller than it was 30 years ago. Just since 2000, state employment has declined 17%. Michigan ranks 45th in the number of state/local employees per 10,000 citizens, according to Census Bureau data.

Our over-arching goal must be to grow our state's economy and create jobs. To do that, we need a tax structure that allows us to invest in our state, because at the end of the day, businesses and individuals want to be in a state that is thriving, not a state that has failed to invest in its future.