Small Business Skeptical of "Good Jobs" Legislation

Date: March 23, 2017

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Big business tax handouts are back in style this session

March 23, 2017 (Lansing) – The state’s leading small business organization, the National Federation of Independent Business (NFIB), said that small business owners have seen enough of “good jobs” promises through targeted tax incentives to know they don’t work.

The skepticism is in reaction to legislation reported out of the Senate Economic Development Committee that would create a new scheme of diverting tax revenue from employer payroll withholding to companies that are approved by the Michigan Strategic Fund. The intended purpose of the proposed legislation, Senate Bills 242, 243 and 244, is to attract companies to Michigan with the targeted tax breaks.

“While we do not doubt the good intentions behind this legislation, they are a distraction and departure from the successful fiscal policies that have dramatically improved Michigan’s overall economic climate for all businesses and citizens of our state,” said NFIB State Director Charlie Owens. “It is disappointing to see the legislature drift back toward these quick fix economic development programs while broad based overall tax reform has been proven to be the better approach.”

Owens said that companies lured into the state by targeted tax incentives often end up being direct competitors to established businesses that have been in the state for years providing jobs and paying taxes without special treatment or tax breaks.

“Rosy job creation data provided by advocates of these programs rarely account for the job displacement that can occur under these circumstances,” said Owens. “In the future, when state budgets are stressed due to an economic downturn and tax revenues have been diverted to private companies, all Michigan business and citizens will end up picking up the tab for the shortfall through general tax increases and/or budget cuts.”

Owens pointed out that targeted tax handouts to select industries and individual companies through the MEGA program, and refundable tax credits baked into the old Michigan Business Tax, were the hallmark of the failed Granholm administration and Michigan’s lost decade. “Even now, current budgets are stressed trying to account for billions of dollars given away during the last big ‘good jobs’ program,” said Owens. “We need to learn from the mistakes of the past and stick with what works over the long run.”

The bills are now on the Senate floor for further consideration.

Related Content: Small Business News | Michigan | Taxes

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