SBT Not The Culprit
The report from the Upjohn Institute for Employment Research in
"We were not surprised," said
"Even though we operate in the
The Upjohn study tied
"This finding makes it unlikely that
As for the state's tax standing in relation to the rest of the nation, the Upjohn study found:
- Overall state and local taxes per dollar of personal income were 5 percent below the
- Average state and local business taxes per dollar of private gross state product were 12 percent below the
- State and local business taxes on investment in a new business facility were 19 percent below the
The study went on to calculate that a replacement for the SBT could boost economic growth statewide by 0.09 percent to 0.16 percent, depending on what type of tax is enacted and what kinds of changes are made to public spending in the state.
It also reported that
"These business tax changes would make up no more than one-ninth of this growth gap at best," read the report.
Shore said the biggest news from the study for the MEDC was that
"When GM, Ford and Chrysler are doing poorly, the whole state is impacted significantly. That was something that needed to be said, because in all of the discussion about
The day state lawmakers gave the SBT an exit two years before it was to have expired, the state agreed to give Ford Motor Co. $151 million worth of SBT credits over 20 years for the automaker investing up to $1 billion in state facilities. With the SBT finished by the end of next year, the state will have to find a replacement credit to get the company's investment.
If the new tax is based on profits and if Ford continues to lose money, Shore said the MEDC will find a way to keep its commitment to the company. He also said lawmakers have assured the agency the SBT replacement could be used as a business incentive.
"We found our business taxes are at or below the national average and the average of neighboring states," said Shore. "The argument that there is a simple solution — and that is, just keep cutting business taxes and businesses will flow across the state border — just doesn't hold a whole lot of water."