Recent Evaluation of Michigan's Business Tax

In the summer of 2007, Michigan replaced its Single Business Tax with a new tax- the Michigan Business Tax. Under the leadership of Democratic Governor Jennifer Granholm and a Democratic state Congress, this new tax was passed over the objections of many businesses and groups in Michigan.

According to proponents of the new tax plan, 75% of businesses in Michigan would get a tax cut, primarily industrial and telecommunications firms. But the overall amount of money that the state would bring in would grow, so that means that under the new tax plan the remaining 25% would pay more in taxes. These groups would be the financial section and real estate sectors.

One year later, I have a question for you- what two industries are destroying our economy? Banks and real estate! Bingo! The very industries that the state raised taxes on went into recession, driving the rest of the economy for our state down, and ironically, because the auto industries in Michigan ran out of credit, destroying the very firms they were supposed to be helping.

Anyone who wants the state to do more in our economy, to bail out industries, to change taxes around to benefit one group over the other, or who want to give tax breaks to favored industries and punish others, better think about this example- the state doesn't have a freaking clue what it is doing. The law of unintended consequences takes over after the state makes changes- in this case, the state of Michigan may have actually helped to collapse our national economy by attacking banks and real estate with higher taxes right when these industries needed the most help.

Information for this post came from this source.