Tax Issues Cloud Advancement

October 23, 2007
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Despite all of the blunder and hype on the topic of late, tax policy alone should not be the focus for re-calibrating Michigan’s economic stability. There are stark reasons to be concerned about this state’s labor force and its ability to move beyond the old models of business productivity based on a strict manufacturing model and skill set.

The new vision of sustainable employment and growth is not about having 100 people stacked up on an assembly line. The new paradigm is all about the need to have 100 well-educated individuals lined up to provide their polished abilities to help build a new economy. Attempting to save old manufacturing facilities by disbursing huge tax breaks misses the mark in an age when a more appropriate response would be to encourage such facilities’ preservation only if they are directed to growth industries outside the declining manufacturing sector, including information technology, biotech, biofuels, computer science and software development sectors.

Such were the findings included in the recently released study by the Land Policy Institute at Michigan State University. In some ways, the report follows the path clearly established by groups such as the Center for Michigan, which has advocated since its inception less reliance on voodoo tax schemes in favor of the pursuit of a more educated workforce and the attraction and retention of bright people to drive the economic engine of this state into the future.

State government alone cannot solve all of the ills of a struggling economy. But it can certainly be a catalyst to sound policy. Whether through a hodgepodge of scatter-shot taxing procedures or misappropriated spending priorities, the political leaders of this state aren’t coming close to achieving what we need most — a far-reaching and broadly acceptable agenda for restructuring our economy and helping our citizens achieve. The business community also must embrace its vital role in this process and do all that it can to influence policy and long-range strategic thinking.

While it might be necessary to dangle tax incentives to firms considering locating in Michigan over other states, it is just one tool and overlooks the basic reason new economy business would come here in the first place — a highly educated and well-versed worker base that will enable firms to compete on an international scale.

This state’s tax burden on businesses remains in the middle of the national pack. Instead of pursuing a multiplication of tax schemes to possibly lure business, why not provide a tangible reason for coming — or staying — here? Let’s put the spotlight on doubling the number of college graduates in this state. Cuts in appropriations to higher education each and every year, causing huge increases in tuition costs for Michigan families, aren’t making it any easier to achieve such a goal.

While legislators continue to spend time tweaking laws regarding motorcycle helmet use and other mundane initiatives, we languish without true strategies to move toward a better economic model. It’s not about finding jobs for one business or industry, or continuing the pursuit of outmoded, low-skill manufacturing based stopgaps. The reality is we can and must do better.

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