Let's talk about Michigan, and its latest legislative attempt to sabotage economic progress. Picture this: Governor Gretchen Whitmer and lawmakers in Lansing are seriously considering a bill to hike the corporate tax rate, ostensibly to fund corporate tax credits designed to lure businesses to the state. It's as if they've read the "How Not to Run a State Economy" handbook and decided to enact every chapter.
First, let's address the sheer absurdity of this idea. Raising corporate taxes to fund the state's Strategic Outreach and Attraction Reserve (SOAR) Fund is like digging a hole in your backyard to fill another hole in your front yard. It's the economic equivalent of a dog chasing its own tail. It's ludicrous and, frankly, an embarrassment for a state that should know better.
Here's the rub: Corporate tax hikes are the antithesis of a free-market approach. They signal to businesses that Michigan is not a friendly place for investment. Higher taxes mean higher costs, and higher costs mean companies will look elsewhere. It's basic economics. When you increase the burden on businesses, they pass those costs on to consumers, reduce their workforce, or worse, pack up and leave. The notion that you should turn around and dangle tax credits like a carrot on a stick is not only contradictory but also counterproductive.
Let's dissect the supposed strategy here. Lawmakers argue that these tax credits will attract new businesses, fostering job creation and economic growth. But who pays for these tax credits? The very businesses that are already here are shouldering the increased tax burden. It's robbing Peter to pay Paul, and both Peter and Paul are likely to take their business to neighboring tax-friendly states.
Moreover, this approach fails to recognize the core principle of a thriving economy: stability. Businesses crave predictability. They need to know that the rules of the game are going to stay the same over time. By introducing whiplash policy, Michigan lawmakers are sending a clear message that the state's economic landscape is anything but stable. Why would a company invest in a state that can't decide whether to tax them out of existence or bribe them to stay?
This legislative misadventure is a classic example of trying to have your cake and eat it too. Lawmakers are attempting to position themselves as guardians of fiscal responsibility while being champions of growth. In reality, they're achieving neither. It's a policy that ought to be dead on arrival because it fundamentally misunderstands the dynamics of a thriving free-market economy.
Michigan doesn't need gimmicky tax credits funded by higher taxes. It needs a straightforward, competitive tax environment that attracts and retains businesses through simplicity and fairness. Lower the current six-percent corporate tax rate, compete with neighboring Indiana, reduce unnecessary regulations, reverse its position on worker freedom, and create a stable economic climate. That's the correct way to foster genuine, sustainable growth.
So, to the Michigan legislators enamored with this convoluted scheme: It's time to wake up. Your policy is a comedy of errors that, if enacted, will be the punchline of every economic joke for years to come. Do the smart thing, the right thing, and put this bill where it belongs — the trash.