Business leaders like Snyder plan

Businesses generally seem supporting of Gov. Snyder's proposals to revamp the Michigan tax code, though it remains a gamble as to whether a lower tax structure on companies will be better for economic growth than the tax credits he intends to phase out.

Snyder proposes to eliminate the Michigan Business Tax and its accompanying array of tax credits and incentives and replace them with a new 6% corporate income tax on "C" corporations. The governor said the plan would result in a nearly $1.8 billion tax cut for Michigan businesses and a simpler, fairer and more competitive tax structure.

"Let's stop the tax credits and realize, in many cases, that the only reason they're in the tax code is because someone had more political power," Snyder said in presenting his budget. "We're eliminating all those credits. We will honor past credits, but it is time for simple, fair and efficient on the business side...It will make us among the most competitive in the country for business taxation" and will create jobs.

Snyder's budget would also eliminate tax credits for brownfield redevelopment, the Michigan Economic Growth Authority program -- a favorite stimulus tool of former Goevernor Jennifer Granholm -- alternative energy, film, renaissance zones and other areas.

Snyder's approach has won favor with groups such as Business Leaders for Michigan, the state’s business roundtable. It's a comprehensive approach to managing the state’s finances and making Michigan more competitive to create jobs.

“We support the Governor’s budget recommendation because, like the Michigan Turnaround Plan we proposed last year, it adopts multi-year budgeting, structurally balances the budget and reforms the tax system," said Doug Rothwell, President & CEO. "We urge the public and legislators to view it in its entirety and to resist picking and choosing elements of it. If taken as a whole it is good for Michigan and Michiganders.”

Business Leaders for Michigan strongly support the Governor proposing a two-year budget noting it is critical to changing the culture of fiscal planning in Michigan. “It is encouraging to see more of a long-term view of expenditures and revenues and an effort to address problems now instead of kicking them down the road,” Rothwell said.

In addition to improving budgeting practices and reducing spending, Business Leaders for Michigan applaud the Governor for addressing tax reform in his budget presentation. “Michigan’s most pressing need is jobs,” Rothwell said. “To grow jobs, we must become more competitive. Right now, Michigan’s taxes on job providers are among the highest in the nation, putting us at a disadvantage compared to other states and other countries. The Governor’s proposed tax changes will significantly improve Michigan’s ability to compete for jobs. We look forward to working with the Administration and the Legislature to make sure we are competitive both nationally and globally.”

MI Perspective: It's no surprise that businesses like the prospect of lower tax rates. What remains to be seen, however, is whether those rates actually do create jobs either among existing employers or by attracting new businesses. Companies and the consultants they hire to select job sites often respond very favorably to credits. Moreover, the cuts in funding for redevelopment programs will thwart improvements in blighted areas that are of no interest to anyone. Still, the worst-case scenario is that Snyder will fall in love with his perceived mandate for a conservative agenda as other new governor's like Wisconsin's Scott Walker whisper in his ear. An attempt to improve state finances on the backs of unionized employees would bring shame to a state built with the help of organized labor in an attempt to service to the unending greed of corporate CEOs and the GOP puppets who do their bidding.