Over Last Five Years Michigan has Moved into the Top 12 States
Michigan Has Come a Long Way in Recent Tax Ranking
Michigan’s comeback continues.
While the overall ranking was unchanged from 2015, sitting at No. 12 still means Michigan has one of the nation’s most competitive tax codes. Wyoming ranked No. 1. New Jersey, meanwhile, ranked No. 50.
While benchmarks like property and unemployment insurance taxes still could use some improvement, changes in those taxes that will be phased in over the coming years will probably move the needle in Michigan’s favor.
“Michigan avoided the Unemployment Insurance Tax penalty trap that is plaguing many states right now because we paid off our federal loans with money borrowed at a lower rate on the open market,” said NFIB State Director Charlie Owens. “As those loans are paid off the Unemployment Tax burden will decline as well.”
Owens also pointed to significant reforms in the state’s Personal Property tax laws that are being phased in over the next 16 years. “As the property tax burden diminishes over time we expect to see an improvement in the ranking for that metric,” said Owens.
Here is how the state stacked up this year:
Corporate Tax Rank (No. 8)
Individual Income Tax Rank (No. 14)
Sales Tax Rank (No. 9)
Unemployment Insurance Tax Rank (No. 47)
Property Tax Rank (No. 25)
The rankings reward states with neutral tax codes that “do not distort business decisions,” according to the report.
“Our goal with the State Business Tax Climate Index is to start a conversation between taxpayers and policymakers about how their states fare against the rest of the country,” said Tax Foundation Policy Analyst Jared Walczak. “While there are many ways to show how much a state collects in taxes, the Index is designed to show how well states structure their tax systems, and to provide a roadmap for improvement.”