May 27, 2014 at 1:00 am


Michigan better without business tax

Would Mark Schauer arrest the progress Michigan has made under Gov. Rick Snyder? (David Coates / The Detroit News)

Just a few years ago, Michiganís economic outlook looked weak as the cold, hard reality of being unemployed had become a real worry for many Michiganians.

To make matters worse, Michiganiansí frustrations with Lansing began to mount as the state faced budget deficits year after year, a burdensome tax code and an unfavorable business climate. As a result, then-Gov. Jennifer Granholm and the Democrats pushed for the Michigan Business Tax (MBT), signed into law in October 2007.

Sold with high hopes, the purpose behind the MBT was to eliminate the existing Small Business Tax (SBT) and replace it with a simpler and less burdensome tax reform. Rather, when it was all said and done, Michiganians received the biggest tax increase in state history. In addition, a 2008 Michigan Chamber of Commerce survey indicated that 78 percent of respondents said that when compared to the SBT, their tax burden was higher and 94 percent said the MBT was either as complicated, or more complicated, than the SBT.

Under Granholm, Michigan owned the highest unemployment rate in the country from April 2006 until May 2010, peaking at 14.2 percent in August 2009.

In 2009, the state government shut down as the result of a budget shortfall of $2.8 billion. During the lost decade, Michigan lost nearly 600,000 jobs while the stateís business tax climate ranked 49th in the nation.

These circumstances were unacceptable for a state that has been looked at for so many years as an engine for jobs. Subsequently, Gov. Rick Snyder immediately began lobbying for the elimination of the MBT upon taking office. In 2011, the Michigan Legislature voted to remove and replace it with a flat 6 percent corporate income tax imposed only on ďCĒ corporations.

As part of replacing the MBT, Snyder bridged the $1.8 billion annual revenue by streamlining Michiganís tax code to be simpler, fairer and consistent with the rest of the country.

Positive results were seen immediately as just a year after throwing out the MBT, Michiganís personal income grew 5.2 percent in 2011, fifth highest in the nation. In addition, Michiganís business tax climate was upgraded from 49th to 7th in the nation in February 2012.

The jobless rate has since fallen to its lowest since April 2008 at 7.4 percent while over 255,000 jobs have been created since December 2010. Also, a few weeks ago, MiQuest reported that Michiganís entrepreneurial climate has gone from 41st to 6th in the nation. Moreover, Business Leaders for Michigan, the stateís business roundtable, projected recently that the Michigan economy will continue to grow in the next 6 and 18 months and also outperform the U.S. economy during that time.

In a candidate, we must focus on results. Under Snyderís leadership, the state has come a long way in just under 4 years. After much calculated and relentless action, Michigan has a positive economic outlook while the Legislature has gone from having to plug deficits and cut spending to deciding how best to invest surpluses.

Mark Schauerís resume is chocked full of poor decisions. During the most difficult economic times, Schauer, like Granholm, has shown a history of looking exclusively to tax increases. Throughout Schauerís time in the Michigan Legislature, he voted for or sponsored legislation supporting higher taxes over 40 times. Then, after being elected to Congress he voted for Cap and Trade, which, at the time, the Wall Street Journal called ďthe biggest tax in American history.Ē Finally, he topped off his short tenure in Congress by voting for ObamaCare, a law that equals to at least $400 billion in tax hikes for Americans.

Rick Snyder was elected during one of the most difficult economic times in Michiganís history and from the beginning decided that kicking the can down the road wasnít good enough . He has made difficult and unpopular decisions. Three years later, Michigan is healthier for it.

Brandon Helderop is a New Hudson-based freelance writer who is active in the Republican Party.