Business tax cuts, elimination of MBT not resulting in more Michigan jobs

| Wednesday, December 12, 2012
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Gov. Rick Snyder and supporters of right to work say the highly controversial new law will spur new jobs and investment in Michigan. We'll see.

But another of Snyder's signature legislative victories has so far failed to produce promised jobs.

You may recall that the 2011 elimination of the hated Michigan Business Tax and a $1.7 billion business tax cut were supposed to result in businesses creating thousands of new jobs.

We are in the first full year of the new business tax structure, but the employment results are not encouraging. Job growth has slowed considerably since last year. Actually, there were 7,300 fewer jobs in Michigan in October than there were in January, according to the Bureau of Labor Statistics.

(One caveat: some economists say the state's reported loss of 16,500 jobs in October likely was overstated and will be revised.)

Michigan also has become a less attractive state for new investment, according to Site Selection magazine's annual business climate survey, which shows that Michigan fell from 15th place in 2011 to 23rd this year.

Business Leaders for Michigan noted that Michigan's new corporate income tax was viewed as "slightly more negative than the MBT" by Site Selection "due to the loss of tax credits and incentives for larger businesses. The ranking reflects how attractive a state is for large corporate investments rather than its entrepreneurial environment."

What to make of this? Maybe it's too early to judge Snyder's "reinvention" of Michigan. Or maybe changes in state tax and regulatory policies are not strong enough levers to change the larger forces of the macro economy.

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