Michigan Business Tax Incentives Miss the Mark and Waste Taxpayer Money Economic Study Proves What Small Business Knows


LANSING, May 15, 2009 — The state’s largest small business association, the National Federation of Independent Business, has called the Anderson Economic Group study on Michigan business tax incentives “spot-on” in its conclusion that the efforts are mostly ineffective. The study, contracted by the Michigan Education Association, was released by the Anderson Economic Group at a meeting held today in downtown Lansing.

“With the possible exception of PA 198 abatements that encourage investment in Michigan manufacturing facilities, most of these hand-out programs are nothing more than a photo and press conference opportunity for politicians and the economic development bureaucrats,” said NFIB state director Charlie Owens. “The ‘ready, shoot, aim’ approach at targeting tax relief to a specific industry or type of business is not going to make a significant contribution towards the intended goal of helping business create jobs.”

Owens said the study backs up a recent NFIB survey that revealed small business owners have had it with state-sponsored “give-away” programs targeted to pet industries or businesses. When asked if they support tax credits and economic incentives targeted to a specific company or industry, business owners responded with 21 percent saying yes, 67 percent saying no and 12 percent undecided.

In recent years, Michigan has attempted to attract specific companies and certain industries by offering generous tax credits and other incentives. Similar incentives have been offered to companies already in the state that promise to expand and create new jobs. Recent examples include incentives for the movie industry, alternative energy, life sciences and high-technology companies.

But small business owners are not buying it. “They see clearly that as more tax dollars are lavished on whatever pet industry is popular at the moment, there is less money available to improve the overall state business and tax climate so that all businesses have an even playing field to compete and create jobs,” said Owens. “Many small businesses believe that the tax hikes they have seen from the Michigan Business Tax are directly taking money out of their pocket to fund these other businesses—and they don’t like it.

The survey polled NFIB small business members. More than 600 responded to the question.

NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information about NFIB is available online at www.NFIB.com/newsrooom.