Key To Economic Strength Eliminate SBT
The anticipated announcement last week by the Van Andel Institute to expand, not only its physical property but the research and education components that drive it into Phase II, is tremendous news from Michigan’s acknowledged “crown jewel” of the Life Sciences industry. Currently, the VAI is not only performing as a research facility (with successes) but now also stepping up as an educator. The proffered academic resources from Grand Valley State University President Mark Murray continue to create new collaborative efforts and partnerships.
Former Perrigo Chairman of the Board Michael Jandernoa noted for the Business Journal, “We have the research expertise at the Van Andel Institute leveraged with the University of Michigan, Michigan State, Wayne State and now Western Michigan University, and it creates opportunities for commercial partners and research organizations that are interested in partnering and taking that opportunity fro the research step into the commercialization phase.”
Now consider Gov. Jennifer Granholm’s drive to float a $2 billion bond proposal under a “Jobs Tomorrow” proposal, which she thinks will fuel jobs in life sciences, technology and in the homeland security fields. She asks for rational debate for an irrational plan.
While the Life Sciences industry would not mind government money for what all consider to be notoriously more risky business, one has to ask when government has ever been able to create jobs in the private sector. The great wisdom of the Renaissance Zone and Brownfield legislation was that it cleared a path for private industry to reclaim existing properties and businesses by clearing the tax burden related to it. Therein lies the key to sustaining Life Sc and other industries
In a recent issue of the Michigan Chamber of Commerce publication Michigan Forward, recently retired — and widely respected — Comerica Chief Economist David Littmann candidly emphasized that as much as 80 percent of the state’s current economic problems are tied to its tax burden, “way above the norm for the U.S., not even to speak of our competitors in Asia.” There is agreement of that assessment from many economists, and underscored by the business community.
It is not bad enough that the governor would create another $2 billion in debt for Michigan citizens (plus bond interest) already suffering the highest unemployment rate in the land, but her Single Business Tax proposal is schizophrenic. While barely reducing this torture tax unique to Michigan, there are backhanded increases of significant proportions, the worst of which would be levied on the insurance industry, doubling its tax burden. To whom does the governor believe those taxes would be passed?
Grand Rapids area business owners and CEOs crammed the governor’s hearing on the SBT proposal on May 2, and even those who would benefit indicated it is not, in the long view, a good proposal.
As one business owner is reported to have remarked, “Just get out of the way” of business. The key to new economic strength is not additional debt, more enormous than ever before contemplated, but it eliminating Michigan’s uniquely unfriendly business tax. There are no takers for any job scheme plotted by government in a state that then slaps business owners with hefty fines for doing business.