Opinion: Stop corporate welfare handouts

Gene Clem

Many of Michigan’s industries are dying, and corporate cronyism is helping to put the nail in the coffin. Unfortunately, our state legislators are on the verge of making the problem even worse.

Rather than robbing struggling taxpayers to lavish cash on wealthy businesses, Michigan should take steps to create a fairer and more business-friendly climate for everyone, writes Clem.

On Nov. 11, Michigan lawmakers proposed expanding a bevy of business tax incentives, including the 2017 “Good Jobs for Michigan” scheme designed to lure in prospective corporate entities with the promise of taxpayer assistance. The new bill would increase the cap on revenue losses related to the program from $200 million up to $500 million, forcing Michigan taxpayers to endure an additional $300 million in lost revenue.

More:Michigan considers more tax breaks for businesses; critics cry 'cronyism'

As it stands, the move to expand the Good Jobs for Michigan program is just the latest instance of corporate welfare to crop up throughout the state. It’s a tactic Michigan has tried before to disastrous effect. The Michigan Economic Authority (MEGA) law is a prime example of such a debacle. According to studies, MEGA either had no effect on business retention or actually caused business to move out of state.

Taxpayers dumped their hard-earned money into a business incentive scheme, and our state government had nothing to show for it.

The sad reality is that MEGA, Good Jobs for Michigan and other programs like it are just corporate cronyism, pure and simple. And now, our legislators here in the Wolverine State are looking to expand that cronyism even further.

A prime example of just how far Michigan lawmakers will go to throw tax dollars to win the favor of billion-dollar businesses is the recent attempt to lure Amazon to the state.

When Amazon was shopping around for prospective locations for its “HQ2,” state governments stumbled over each other to offer the company massive handouts. Michigan was no exception. Our legislators offered the online retail giant a whopping $4 billion taxpayer-funded incentive package to center its secondary headquarters here — even though our state already remains on the hook for billions of dollars in obligated crony payouts.

Corporate cronyism also creates an atmosphere of entitlement and reliance. Businesses become dependent on the government to pay their bills, weakening the tax base, harming the business climate and making it difficult for small businesses to success. 

Once the government assistance begins, companies expect to remain on the public dole. It is an addicting reality for businesses. It’s one that robs them of the motivation they require to operate efficiently and effectively. It strips companies of their ability to effectively compete, while shouldering taxpayers with the burden of excessive debt.

Rather robbing struggling taxpayers to lavish cash on wealthy businesses, Michigan should stop corporate welfare handouts and instead take steps — like lowering taxes and regulatory burdens for everyone — that create a fairer and more business-friendly climate for everyone.

Gene Clem is a member of the Kalamazoo County Republican Party and the Southwest Michigan Tea Party Patriots.