Even business is not convinced that reducing business taxes by 86% and raising personal income taxes by 32% will improve our state's financial fortunes and add jobs. In fact, one writer for Michigan Business says:"... where (Governor Snyder's) justification for business tax cuts falls apart is in his contention that easing the tax burden on businesses will “enable all businesses and industries, large and small, to grow and create jobs.”
Republicans have been making this claim since at least the days of Ronald Reagan, but there’s little evidence that cutting taxes leads to job growth.
Michigan cut taxes throughout much of the past decade, but still lost nearly 850,000 jobs.
I know — you’re dubious of the claim Michigan cut taxes.
But the state tax burden — taxes as a percentage of personal income — has fallen from 9.5 percent to 7 percent over the past decade, according to the Senate Fiscal Agency.
Michigan was the only state in the country to experience a general fund revenue decline between 2000 and 2009, according to state Treasurer Andy Dillon.
State business tax revenues have fallen 15 percent since fiscal 2008, the year the MBT was enacted.
And Michigan’s business tax climate, which includes sales, personal income, business and unemployment taxes, jumped to 17th last year from 28th in 2006, according to the conservative Tax Foundation.
That included a period in which Michigan’s personal income tax rate jumped from 3.9 percent to 4.35 percent and the MBT, with its 22 percent surcharge, was implemented.
The MBT should be replaced, if for no other reason than to simplify what is an unnecessarily complex tax.
But it’s apparently not the jobs killer that Snyder and many lawmakers claim."
www.mlive.com/business/index.ssf/2011/03/rick_haglund_history_doesnt_pr.html
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