Calley: Michigan can’t afford a return to ‘lost decade’

Lt. Gov. Brian Calley

Making Michigan the best place for job growth has been the focus of Gov. Rick Snyder’s administration since before taking office. Together, we have made huge strides in getting Michigan on a path to success for more and better jobs. The results are clear; in August, Michigan’s unemployment rate fell to 5.3 percent, the lowest in 14 years. More than 420,000 new private-sector jobs have been created since the Snyder team was first elected.

While employers make choices every day about where to invest based on a wide variety of factors, the reality is that getting the state’s fiscal house in order and making our tax system simple, fair and competitive has substantially contributed to Michigan’s improved economic performance. Michigan is finally in the mainstream of states with a straightforward corporate income tax. We cannot afford to turn back the clock to the “lost decade.” Yet that is exactly what three unions want to do.

The Michigan Regional Council of Carpenters and Millwrights, Operating Engineers, and Michigan Laborers have devised an anti-job scheme to put a massive 83-percent business tax increase on the Nov. 2016 ballot. This $900 million tax increase would have devastating consequences for our state’s economy and jobs climate.

Do not be fooled by the language; this tax increase is a thinly veiled and potentially fatal attack on small businesses across the state. The job providers being targeted include more than 9,000 small businesses that have just begun to thrive again. They are jump-starting our local economies thanks to the competitive changes we implemented with our legislative partners when we took office.

For more than 30 years, Michigan had extraordinarily complicated business taxes that double-taxed many employers. This resulted in Michigan having the second-worst corporate tax ranking in the country, according to the Tax Foundation.

In 2011, in partnership with the legislature, we repealed the onerous, job-stifling Michigan Business Tax and replaced it with a simple 6-percent Corporate Income Tax. That change eliminated the double taxation of small businesses and sent a message that Michigan is serious about job growth. When we moved from the MBT to the CIT, some larger corporations experienced an increase in their tax burdens. But they generally accepted this increase for the sake of getting a simplified, fair and more reasonable tax system for all job providers.

The unions behind this anti-job proposal want you to sign petitions for a statutory initiative to increase the CIT from 6 to 11 percent. This would catapult Michigan to the second-highest corporate tax rate in the nation, and make our taxes dramatically higher than neighboring states. Illinois has a 7.75-percent rate, while Indiana has 7 percent, Minnesota has 9.8 percent, and Wisconsin has 7.9 percent. (Ohio has no CIT but has a gross receipts tax.) That would be bad news for our job growth prospects.

The backers of this proposal would have you believe all C-corporations are big businesses and the 83 percent tax increase would not impact small businesses. That’s simply not true. More than 9,000 small businesses in Michigan would see their taxes nearly double if this proposal passes.

Jeopardizing the state’s jobs climate with this counterproductive ballot proposal is the wrong way to go, because it’s taking Michigan backward at a time when we need to be moving forward even faster.

Brian Calley is lieutenant governor of Michigan.