Michigan Business Owner: Tax Reform Means 'Our Company Will Create Jobs'
Kalamazoo-based business will hire people 'directly' because of MBT elimination
State Democratic and union leaders are saying that lower business taxes will not “guarantee” job creation, but one business leader says that is exactly what he intends to do.
After a Republican Legislature passed a state budget cutting funding from the School Aid Fund in order to replace the Michigan Business Tax with a flat 6 percent corporate tax, many Democrats went on the attack.
House Minority Leader Rick Hammel, D-Mt. Morris Township, told MIRS Capitol Capsule (subscription required), “[Republicans] raided the School Aid Fund… to pay for their 82 percent tax break for giant corporations with no guarantee of a single new job."
Earlier this year, Senate Minority Leader Gretchen Whitmer, D-East Lansing, wrote an Op-Ed in the Detroit Free Press stating, “[The tax cut proposal] lacks any evidence it will create jobs or Michigan investment. …”
But Kalamazoo business owner David Rhoa said creating jobs is precisely what his business is going to do.
“Our company will be creating jobs directly because of this change in the tax code,” said Rhoa, the President of Lake Michigan Mailers.
Rhoa’s company is located near the Michigan-Indiana border and has locations in both states. He gave a presentation in 2007 warning that a tax hike then being prposed would result in businesses taking money out of Michigan and putting it into other states. He said then that Indiana's tax climate is much friendlier toward business.
“In 2007, I testified that Lake Michigan Mailers was looking for places to expand our business,” said Rhoa. “I said at the time that even though Michigan is, literally, our middle name, if we had to, we would find a place in Indiana or Ohio if [the Legislature] goes ahead with the tax increase.”
“So we made a multimillion dollar investment in Indiana because of what Michigan did to itself.”
Michael LaFaive is a policy analyst for the Mackinac Center for Public Policy. He said Rhoa’s story is not atypical for the state over the past few years.
“Taxes are an important variable in the job creation formula,” said LaFaive. “It’s economics 101, really.”
“Would you like more jobs in the state? Cut the price of creating them.”
Rhoa said the most important thing that Michigan did by overhauling the tax code was “telling businesses that this is a good place to do business.” He said the best thing government can do for business is: “Have a stable, predictable, equitable tax structure that promotes growth. And that growth creates economic development. And that economic development raises all boats.”
“As a business owner, I have two choices: I can pay the tax man or I can invest in my business. And I want to invest in my business.”
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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MichiganVotes.org June 3 Weekly Roll Call Report
Every week, MichiganVotes.org sends a report on interesting votes and bills in the Michigan Legislature, and includes how each legislator voted. To find out who your state senator is and how to contact him or her go here; for state representatives go here.
Senate Bill 383, Revise state film subsidy program, passed 37 to 1 in the Senate
To revise details of the state’s unlimited film subsidy program, now limited by Gov. Snyder’s tax system overhaul (plus, the Legislature has appropriated a "pot" of $25 million that can be handed out to film producers). Under the bill, the state government film office could still grant “refundable tax credits” of up to 42 percent of a producer’s Michigan expenses, which in most cases likely results in the state writing checks to producers. However, the agency could also choose to give smaller credits to a particular producer.
Who Voted "Yes" and Who Voted "No"
House Bill 4111, Provide liability waiver to volunteer conservation workers, passed 33 to 3 in the Senate
To establish that a volunteer working on a Department of Natural Resources wildlife habitat improvement project has the same immunity from civil liability as a state employee working on the project.
Who Voted "Yes" and Who Voted "No"
House Bill 4111, Gleason amendment, ban replacing DNR conservation workers with volunteers, failed 10 to 26 in the Senate
To prohibit allowing volunteers to do work on Department of Natural Resources conservation projects that previously was done by paid full-time government employees.
Who Voted "Yes" and Who Voted "No"
Senate Bill 331, Repeal certain liquor tax, passed 38 to 0 in the Senate
To eliminate a 1.85 percent tax imposed on the retail sale of liquor for off-premises consumption. The money from this tax is earmarked to the Liquor Control Commission, which oversees the state's liquor price controls and the regional liquor wholesaler and distributor monopolies the legislature has authorized for particular business owners.
Who Voted "Yes" and Who Voted "No"
House Bill 4623, Let Detroit keep imposing higher income tax, passed 56 to 53 in the House
To allow Detroit to continue to uniquely impose an income tax of 2.5 percent on residents and 1.25 percent on nonresidents. Other cities are allowed to impose individual income taxes at 1 percent for residents and 0.5 percent for nonresidents; this is one of many laws that provides unique privileges or powers for "a city with a population greater than 750,000." The bill would lower that to 600,000 to accommodate Detroit's ongoing population decline.
Who Voted "Yes" and Who Voted "No"
House Bill 4624, Let Detroit keep imposing higher utility tax, passed 57 to 52 in the House
To allow Detroit to continue to impose a 5 percent utility tax on telephone service, natural gas and electricity. This is one of many laws that provides unique privileges or powers for "a city with a population greater than 750,000." The bill would lower that to 600,000 to accommodate Detroit's ongoing population decline.
Who Voted "Yes" and Who Voted "No"
SOURCE: MichiganVotes.org, a free, nonpartisan website created by the Mackinac Center for Public Policy, providing concise, nonpartisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit MichiganVotes.org.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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