Bringing Jobs to Michigan
Jobs Wanted = Businesses Wanted
In order to create more jobs in Michigan, we need more businesses in Michigan and the businesses that are here need to expand.
Michigan needs a virtual “Businesses Wanted” sign
We need a business environment in Michigan that screams out LOCATE YOUR BUSINESS HERE!!!!
Lowering taxes on businesses sends this message and will lead to lower costs for everybody, more JOBS, and more revenue to the State!!!
Eliminating as many taxes on businesses as possible is NOT the “We love the rich and don’t care about the poor” philosophy as it is often portrayed. Lower taxes on business help everyone regardless of economic status.
In the end, businesses don't really pay taxes, people always do. Businesses include the cost of their taxes in the price of the product or service they provide. A business owner needs to receive a certain return on his/her investment (time/energy/money) in order to make it worthwhile. If taxes go up, the business owner needs to preserve the return on investment and will raise prices. If he cannot raise prices, he will try to cut costs (including jobs). If he cannot do either of these, he will have to move to a location where he can make his equation work again. If there are no such places, he will close the business. For example, if Spartan stores have their taxes raised, it will likely cost us more to buy a can of corn. That is, unless market forces from a canned corn distributor in Tennessee (who pays less business tax) force Spartan to keep their price the same. If this happens, Spartan will try to figure out a way to reduce their production costs. If they cannot find ways to lower the cost of their production, they will have to move to somewhere like Tennessee or close their doors. Taxing businesses is taxing buyers.
Michigan needs the friendliest business environment – not the 22nd!!!
Click here to read a recent study by the Anderson Economic Group that ranks each of the 50 states based on their business tax burden. It shows that 21 states have a better business tax environment than Michigan.
A business looking to relocate from a poor business environment is not going to pick a state like Michigan that is in the middle of the pack. They are going to shoot for the best. If a business currently in Michigan sees opportunities to produce goods cheaper in another state (or country), they will head there.
We need to eliminate the Michigan Business Tax altogether and reduce most other taxes that the State places on business.
High Income Tax on “Rich” = High Taxes on Small Business = Higher Costs and Fewer Jobs
The financial strength of, and tax burden on, small businesses and their owners are closely interconnected. The profits of most small businesses are reported as income on the business owner’s personal income tax statements. If there is a high income tax, the business is being taxed at a higher rate.
Evidence discovered by Arthur Laffer and Stephen Moore's new study published in March of 2009 for the American Legislative Exchange Council, "Rich States, Poor States," outlined some very interesting statistics. The following statement is taken from an article they wrote about their new study in the May 18, 2009 Wall Street Journal.
Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.
More from this article can be read at the Wall Street Journal
The favorite slogan of many politicians is "tax the rich and big business." This approach is used to gain votes by tapping into an oftentimes legitimate disgust for corrupt businesses that take advantage of their employees. We think, “I’m not rich, I don’t own a business, and besides, my employer doesn’t treat me like I deserve.” However, raising their taxes will mean the costs of the services or goods we buy will be more expensive, or we'll lose our jobs. Either way, would it be worth it? It was Abraham Lincoln who said, “You cannot help the wage earner by pulling down the wage payer.”
Government should not play favorites
The Michigan Constitution states, “All political power is inherent in the people. Government is instituted for their equal benefit, security and protection." (emphasis mine)
Michigan's tax law is full of incentives for certain companies (and therefore certain people). This is a bad idea. What tax burden there is on businesses should be spread out equally among them all and be as low and simple as possible (for those here and those who would like to come). Government’s role is not to pick winners and losers. Government choosing winners and losers is a recipe that cooks up corrupt politicians and lobbyists.
Other Factors
There are many factors that influence businesses locating decisions such as wages, energy costs, resource availability, union member ship, knowledge base, geographic location, etc. Some of these factors cannot be changed, and many others take a long time to change. Since tax structure is oftentimes much easier to adjust, it receives a lot of attention. We can, and should, take measures that will improve Michigan in these other categories as well. These would include removing some of the restrictions that are prohibiting the construction of power producing plants and laws that give individual workers the freedom to choose if they want to join a labor union.