Changes in Michigan's business tax move state to 12th 'friendliest' on U.S. list
How appealing is Michigan to business leaders?
The state is now No. 12 in the U.S. in a national ranking of tax-friendly states, according to a report in the Detroit News.
Michigan changed its business tax structure, eliminating the controversial Michigan Business Tax in 2011.
The Legislature replaced it with a 6 percent corporate income tax that exempts most small businesses, equaling an estimated business tax cut of about $1.7 billion.
According to previous AnnArbor.com reports:
Now, most small business owners in Michigan will only pay taxes on their business profits through their personal income tax return, where they're taxed at a flat rate of 4.35 percent.
In the end, the Senate split evenly on the vote — and Lt. Gov. Brian Calley had to cast a vote to break the tie.
To pay for the business tax cut, the Legislature also approved Snyder's recommended phase-in pension tax, a massive reduction in tax credits for the poor and other income tax code changes.
According to Wednesday's Detroit News report, the initiative paid off in perception across the U.S.: Michigan is now viewed as more competitive.
Comments
Mike K
Thu, Oct 11, 2012 : 6:25 p.m.
Great work by Snyder. I know the left hates logic, but if the environment is not business friendly, you are not going to grow your private sector nor your tax base. Your dear Jenny had eight years. I'm willing to see where this goes. Sorry, but you cannot mandate where private business locates. Lastly, I read all this stuff about growing the public sector. Let me ask you this, if you pay a public sector worker $1.00, and collect only $0.25 in taxes, how are you going to pay him in the future? The answer is that you need a robust private sector, and it looks like Snyder is working in that direction.
4Bells
Thu, Oct 11, 2012 : 12:02 p.m.
To justify the generous business tax cut producing one of the nation's "friendliest" business climates, we need to see results that benefit everyone in Michigan. This tax cut was funded by an immediate & significant sacrifice from a multitude of our citizens: Schools & public education, retirees relying on pensions to pay for life's necessities, municipalities, the working middle class and the poor. This is wonderful for business owners & manufacturers, especially those small, struggling entities. We understand why business & manufacturing owners are happy. However, big financial benefits to business CEO's, without "trickle down" pay back to the rest of us, at the dear cost of those who can least afford it, is blind & irresponsible leadership & government.
snapshot
Thu, Oct 11, 2012 : 5:53 a.m.
And if proposition 2 passes the pension tax will go away and the state will be driven further into debt by special interest. Everybody's property taxes, fees, and other charges will rise and public services will decline with no control over labor costs because the constitution will guarantee public service jobs and raises forever and even our elected officials won't be able to enact legislation without special interest permission. the special interest minority will rule the majority putting an end to any control of special interest labor.
E Claire
Wed, Oct 10, 2012 : 7:47 p.m.
Once again - the tax break went to mostly small businesses like mine, not to large corporations. I no longer have to pay taxes twice on every dollar I make. Would all of you Snyder haters be willing to pay double the income tax you pay now every year to boost the economy? I didn't think so. As for creating jobs, I may not be in a position to hire anyone but I was struggling to pay my bills a few years ago. The tax break and the friendlier business climate has kept me from being another failed business, another foreclosure and I can now put some funds back into the economy; how is that a bad thing? This new ranking will give more businesses incentive to open offices here in the state. Many stayed away due our tax structure but are seeing our state in a new light. Every small business owner I know is benefiting from this and we are not rich in any sense of the word. We are average middle class people who took a chance to be our own bosses and we finally have someone in charge who understands this. I guess Snyder will need to put a D after his name before anyone in AA will give him credit for what he's doing.
clownfish
Thu, Oct 11, 2012 : 1:36 p.m.
Also, I was in favor of re-working the MBT, but was curious how it was going to be done. The reason Snyder would not tell us is because his plan was to raise taxes on seniors and the working poor, while cutting education funding. I am still waiting to see positive results from this redistribution of taxation.
clownfish
Thu, Oct 11, 2012 : 1:29 p.m.
As I understand the reasoning for cutting business taxes and passing that cost on to seniors and low income earners, it was to "create jobs". You admit that you have not done this. If the mantra of "cutting taxes creates jobs" is true, why have you not created those jobs? Could it be that there is more to the equation than taxes...say maybe demand of goods/services? Then again, what do I know, I only aced econ courses and run my own business.
Arborcomment
Thu, Oct 11, 2012 : 12:42 a.m.
Well written E.
Robert Granville
Wed, Oct 10, 2012 : 5:39 p.m.
What good is this ranking? Can I send it my resume?
Stephen Landes
Wed, Oct 10, 2012 : 5:27 p.m.
If all the nay-sayers were as critical of Granholm as they are of Snyder she would have been a one-term governor. You just had to vote for her -- TWICE -- so we could be "blown away". Well, we were and we're still paying for that bad choice.
Rick Stevens
Wed, Oct 10, 2012 : 4:21 p.m.
I'm sure the Republican plan will be to cut more state services and give businesses another bag of our money. Of course, the last bag of money ($1.8 billion) didn't include (on purpose) any way to measure job growth tied to that huge expenditure. Just throw money at businesses and hope they maybe, somehow, perhaps create some jobs. Kinda like the 'let's make the rich (job creators) richer and things will get better' at the national level. Wasn't Synder supposed to be the 'nerd governor' who was going to use data to make good decisions? There's no data even possible on the expenditure of $1.8 billion to tell if it did what was promised. Awful way to invest that much money I'd say! But then again no data means you can lie all you want!
A2Dave
Wed, Oct 10, 2012 : 4:03 p.m.
So Granholm was responsible for the automotive industry cratering, the collapse of the global financial system, and the deepest global recession since the 30's. Wow! Had no idea she was soooo powerful and soooo influential! And now Ricky benefits from the gradual recovery of both the economy and the US auto industry, and, Wow! Had no idea he was soooo powerful and influential! Remarkable.
A2Dave
Wed, Oct 10, 2012 : 3:58 p.m.
"Tax friendly" to businesses? Maybe. To residents and wage earners like teachers, firemen, cops, and producers (that is, people who actually make something)? Not so much. Thanks, Guv.
E Claire
Wed, Oct 10, 2012 : 7:59 p.m.
Your local flower shop is a "business", as is Stadium Hardware, Hello Faz Pizza, Cloverleaf, Lilly Grace, and on and on. These small business are owned by residents and wage earners who provide services and put money back into the economy. They don't earn a wage but they do have to live on profits regardless of how hard they work or how many hours they put in. What do you have against these people?
Charles Buck
Wed, Oct 10, 2012 : 3:45 p.m.
Since the article speaks in terms of Michigan's rank among the 50 states, here's Rick Snyder's dismal job growth legacy from when he took office until the latest month Bureau of Labor Statistics are available for Michigan's rank in year-over-year private sector job growth. Month, Rank Jan. 2011, 2nd Jan. 2012, 12th Feb. 2011, 3 Feb. 2012, 9 Mar. 2011, 2 Mar. 2012, 14 Apr. 2011, 2 Apr. 2012, 11 May 2011, 2 May 2012, 21 June 2011, 3 June 2012, 20 July 2011, 4 July 2012, 17 Aug. 2011, 5 Aug. 2012, 21 Sep. 2011, 6 Oct. 2011, 6 Nov. 2011, 8 Dec. 2011, 5 Michigan was in a top rank when it was generating 100,000 private sector jobs year-over-year when Granholm handed over the reins. Now the state is generating half as many private sector jobs and falling behind many other states.
Basic Bob
Wed, Oct 10, 2012 : 4:11 p.m.
It's hard to mention Granholm without giving her credit for the single-state recession. Many manufacturing jobs remain unfilled because of lack of skill and motivation. This is the direct result of years of parents and teachers discouraging young adults from pursuing factory jobs and sticking it out to gain the necessary experience to move up the ladder. The lie is dead. Manufacturing is good for America.
javajolt1
Wed, Oct 10, 2012 : 3:03 p.m.
What happened to all that "Recall Snyder" buzz??
walker101
Wed, Oct 10, 2012 : 3:42 p.m.
Unions are low on cash.
5c0++ H4d13y
Wed, Oct 10, 2012 : 3:35 p.m.
They all switched to prop 2.
CuriousOneMi22
Wed, Oct 10, 2012 : 2:06 p.m.
The improvement in the corporate tax ranking is reflected in an improvement in Michigan's job scene. After going 0 for 8 years in terms of payroll employment growth during the Granholm era, Snyder is now heading for a 2 for 2 record in 2011 and 2012. The RSQE at U of M also just forecast job growth for 2013 and 2014 suggesting Snyder will be 4 for when 2014 comes to a close. Michigan is making a noteworthy comeback. MI. Payroll Employment 2008 4162 2009 3872 2010 3861 (after 2 years of Granholm and Obama) 2011 3936 2012(est) 3996 (after 2 years of Snyder) Source: BLS; thousands C1
clownfish
Thu, Oct 11, 2012 : 1:25 p.m.
Seeing as the changes affected 2012, not 2011, he has one year of "progress". In that year unemployment has been pretty stagnant.
1bit
Wed, Oct 10, 2012 : 3:16 p.m.
C1: The auto industry is improving and that's really most of it. Blaming or crediting politicians is something that you can only really do generally 5-10 years after the fact. I happen to agree with Snyder's policies and approach, but it's still too early to say that they are the cause of the improving Michigan economy. In fact, the auto bailout is really more than anything else most likely for the improved economy.
Top Cat
Wed, Oct 10, 2012 : 1:57 p.m.
Creating an environment in which businesses can prosper will help create the growth and jobs we need. Progressives still think you grow an economy with "free" phones and food stamps.
clownfish
Thu, Oct 11, 2012 : 1:24 p.m.
What does a program for free phones started under Bush have to do with taxes in MI? Who said that we could grow an economy with Bush's program of getting phones into the hands of the poorest among us. Why are people so easily swayed by internet rumors? It's so easy to check these things. "The SafeLink program has actually been offering cell phones to low-income households in some states since 2008" "The president has no direct impact on the program, and one could hardly call these devices "Obama Phones," as the e-mail author does. This specific program, SafeLink, started under President George Bush, with grants from an independent company created under President Bill Clinton, which was a legacy of an act passed under President Franklin Roosevelt, which was influenced by an agreement reached between telecommunications companies and the administration of President Woodrow Wilson. Wilson Phones, anyone?" http://www.factcheck.org/2009/10/the-obama-phone/
E Claire
Wed, Oct 10, 2012 : 7:53 p.m.
"Reducing state support for municipalities and schools has only led to layoffs of teachers, firemen and policemen which raises the level of unemployment." Maybe if our municipalities did not waste so much of our money (1 million for a piece of rusty metal?) public workers wouldn't have to be laid off.
Veracity
Wed, Oct 10, 2012 : 4:20 p.m.
415,000 unemployed Michigan citizens are waiting for Governor Snyder and the Republican legislature to create that magical environment "...in which businesses can prosper..." which "...will help create the growth and jobs we need." The $1.8 billion tax reduction for the rich and big businesses isn't working for the unemployed and the middle class. Reducing state support for municipalities and schools has only led to layoffs of teachers, firemen and policemen which raises the level of unemployment. Anymore such innovations from our Republican government and we will regress from slow job growth to net job losses.
xmo
Wed, Oct 10, 2012 : 1:18 p.m.
Just to add to the story: "The Great Lakes State experienced the second-highest increase in rank for its business tax climate nationwide, climbing to No. 12 from No. 18 in a year, according to Washington, D.C.-based Tax Foundation. The improvement gives Michigan the second best rating in the Midwest, trailing only neighboring, No. 11 Indiana." It looks like the Republicans are doing what the Democrats could not!
Veracity
Wed, Oct 10, 2012 : 4:10 p.m.
Apparently you missed my references in my first posting: http://www.milmi.org/ http://milmi.org/admin/uploadedPublications/940_micaetmm.htm By the way, you list a source also but it is "BLS" which is not a URL site. Are those the initials of a relative or a friend?
CuriousOneMi22
Wed, Oct 10, 2012 : 2:11 p.m.
veracity: You may want to consider a name change as Michigan jobs are growing. You cited some figures from the household survey, but failed to note the growth in household employment during the last 2 years or the decline in the jobless rate from 12.4% 2 year ago to 9.4% recently. More importantly, the payroll survey showed employment growth (see my other post). While you are entitled to your opinion, you are not entitled to the wrong facts. Regards, C1
Veracity
Wed, Oct 10, 2012 : 1:34 p.m.
XMO- No Siree! The "improved" ranking has NOT produced many jobs which should be the most important metric. Read the comment posted just prior to yours and check out the references if you do not believe the paltry number of new jobs added in the past year. Rankings are meaningless to the unemployed who still can not find jobs..... all 415,000 of them!
Veracity
Wed, Oct 10, 2012 : 1:17 p.m.
This article, and the referenced article from The Detroit News, does not mention whether the improved tax climate in Michigan has actually led to an increase in new businesses in Michigan and, more importantly, an increase in jobs. Since these important statistics are not mentioned the reader may presume that lower business taxes has actually not produced many new jobs. Municipalities and schools have literally paid the price for the $1.8 billion reduction in taxation of the wealthy, businesses and individuals alike. Teachers, firemen and policemen have been fired to help balance local budgets but have also contributed to raising the unemployment rate in Michigan. Meanwhile, the unemployment rate in Michigan has been climbing since April and was 9.4% in August (most recent data). See: http://www.milmi.org/ Of the nearly 4 million jobs in Michigan, only 46,000 new jobs were added in the past year. See: http://milmi.org/admin/uploadedPublications/940_micaetmm.htm About 415,000 Michigan citizens remain without jobs. Question to Governor Snyder and the Republican Legislature: what is your plan for achieving full employment in Michigan?
Veracity
Wed, Oct 10, 2012 : 4:02 p.m.
Put your elephant hat away: there have been no positive employment numbers that can be credited to Governor Snyder just like you can not discredit Obama because Michigan employment numbers have not improved faster. In fact much of the drop in unemployment since its peak in August 2009 have resulted from the auto bailout. Certainly the idea that tax reductions for the wealthy produce more jobs is discredited. Job creation is directly related to demand for goods which in turn increases when middle class consumers have more money to spend. By reducing state funds to municipalities and to schools and by increasing taxes on the middle class, Governor Snyder and his Republican legislature is starving the middle class, curtailing spending necessary to expand jobs. No kudos for Rick and his Republican manikins in the State Legislature until they come up with a real plan to achieve full employment in Michigan. Have they announced one yet?
CuriousOneMi22
Wed, Oct 10, 2012 : 2:15 p.m.
Michigan is still seeing job growth versus 2 years ago. Good Snyder. Michigan's job levels lag the experience from 4 years ago. Bad Obama. Year Period labor force employment unemployment U Rate 2008 Aug 4,953,499 4,530,186 423,313 8.5 2009 Aug 4,836,608 4,151,433 685,175 14.2 2010 Aug 4,732,119 4,146,090 586,029 12.4 (after 2 years of Obama and Granholm) 2011 Aug 4,653,160 4,167,423 485,737 10.4 2012 Aug 4,658,000 4,221,000 437,000 9.4 (after 2 years of Snyder) Source: BLS
Mike
Wed, Oct 10, 2012 : 1:15 p.m.
Boo.........fire Snyder, we want Granholm back to finish the job she started on this state.................Get your recall petitions out
walker101
Wed, Oct 10, 2012 : 3:41 p.m.
What ever happened to the other recalls? Please start another one, the unions have plenty of cash to spend on another losing effort.
Veracity
Wed, Oct 10, 2012 : 1:18 p.m.
A sensible suggestion.