Rick Snyder's tax reforms could mean 'bright future' for Michigan, says U.S. economist
In one of the final presentations of his career, Comerica Bank economist Dana Johnson said he envisions a “bright future” for the Michigan economy due in part to a rise in manufacturing jobs and Gov. Rick Snyder’s recent tax reforms.
Johnson, who called himself a “real fan of Michigan,” spoke at Comerica Bank’s 2011 Economic Breakfast this morning in Ann Arbor, offering an economic forecast for both the U.S. and the state.
Johnson, senior vice president and chief economist at Comerica Inc., said that although Michigan faced a deep recession in the last few years, recent job growth in the manufacturing sector and Snyder’s business tax reforms are promising factors for the state’s economy.
Economist Dana Johnson said Gov. Rick Snyder's tax reforms, which he is expected to sign into law today, will create job growth in Michigan.
Tom Perkins | For AnnArbor.com
“I think Michigan is really heading in the right direction,” Johnson said. “I really admire the fact that there’s been a big change in the business tax.”
Johnson said that Snyder’s tax reforms — which he is expected to sign into law today — will create an environment that will make Michigan an attractive place to work.
The legislation replaces the controversial Michigan Business Tax with a 6 percent corporate income tax that exempts most small businesses, equaling a $1.7 billion tax cut. It also adopts a phased-in tax on pensions, reduces the Earned Income Tax Credit for the poor, eliminates most of the state’s business tax credits and charitable giving credits.
Snyder has said the tax changes establish a welcome environment for businesses in Michigan, but Democrats argued that the legislation shifts the tax burden from businesses to senior citizens and the poor.
Dana Johnson
Johnson’s comments come as economists debate the impact of Snyder’s tax reform legislation. Lou Glazer, president of Ann Arbor-based think tank Michigan Future, has argued that business tax cuts don’t lead to job growth.
Although Johnson’s forecast was relatively positive, he said Michigan’s economic comeback is still “disappointing and mediocre.” He said growth in the state’s economy will parallel national trends, with an anticipated average GDP growth rate in Michigan of 2 percent to 2.5 percent over the next year, trailing the projected national growth rate of 3 - 3.5 percent.
Johnson cited falling house prices, an increase in energy prices and state and local government cutbacks as reasons for the slow recovery rates.
However, national job growth rates are rising, Johnson said. Nationally, nonfarm payroll growth was 1 percent from April 2010 to April 2011.
In Michigan, that rate was 1.5 percent for the same time period, and 1 percent in Ann Arbor specifically.
Johnson predicted that about twice as many jobs will be created this year as last year, and 2012 has the potential to be moderately stronger than 2011.
“We are seeing reasonably good gains in jobs,” Johnson said. “Over the first four months of this year, we’ve had the strongest job growth we’ve had in five years.”
He said job growth in Michigan has been stronger than national growth due to Michigan’s large manufacturing sector, which “led the way” for job increases in the past year.
“I think Michigan is really going to do just fine in the next 10 to 15 years,” Johnson said. “I think the future of Michigan is bright, and I think the future of Ann Arbor is bright.”
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at or 734-623-2584 or at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
TKA2
Fri, May 27, 2011 : 2:02 p.m.
John Q, a few more things... 1) Where are you getting your numbers? They are not accurate nor complete. As Mark Twain said "There are lies, damned lies, and statistics." Read the budget, its online at State of Michigan website. 2) The business tax change will take tens of thousands of small businesses off of the business tax entirely...this is really, really good for handymen, small shop owners, start ups, etc. 3) The individual tax rate in michigan is going DOWN from 4.35 to 4.25% for everybody! And you prbably disagree with this one but I am 100% ok with pension income being taxed, especially at 4..25%, never knew it wasn't and dont know why someone with pension for retirement income should pay no tax while their neighbor who worked just as long and hard but didnt have the benefit of a pension is taxed on their retirement income. 4) Having said that - I AGREE WITH YOU!!! It would have been easy to make the corporate rate 7% or 8% and even things out a little more and I would fully support that...I dont like large companies make billions or tens of millions getting breaks, they should pay a lot more for the priviledge of operating.
TKA2
Thu, May 26, 2011 : 7:59 p.m.
John Q: First off, I am not trying to justify the change in business tax, simply share what the man actually said. Next, businesses are not getting a 90% tax break,- you just made that up. I have been keeping a close eye out on the web and even called corporate CFO's for reliable info on the tax break and there isnt any! In most cases I dont think businesses have a clue until next years returns are completed. What I have read about the actual change, other than the $1.7b headline number, is that small businesses will be getting most of the break and that large businesses will be paying more in taxes. Please keep in mind most small businesses are just as much the heart of the middle class in this country as are unions, teachers, police, etc. The idea that everyone who owns a business is a fat cat is ridiculous! In most cases any good job (maintenance, administration, etc.) at UofM pays as much and has way, way, way better benefits than a Main St. business owner is getting.
alternativeview99
Fri, May 27, 2011 : 11:27 p.m.
I am confused. The MBT was criticized because it kept businesses from deciding to stay or locate in Michigan to provide jobs. Those kind of businesses are not the kind I associate with owners who are "middle class". And, many small businesses I believe were exempt under the MBT from paying any taxes. I guess I just didn't hear that the MBT hit the middle class business owners so severely. Where is that information available? You point out something I would like to know more about. And, if large businesses are going to be hit the most and pay more taxes, how is that attracting these companies to stay or relocate to Michigan to provide jobs for my unemployed neighbors who are skilled workers and doing work in Minnesota and other places to make ends meet? Finally, I keep coming back to the problem that small businesses in Michigan are hurting not so much because of the huge taxes they pay but because they have experienced decreased sales. How does taking money away from middle class citizens in Michigan, those who are consumers and purchase the goods and services sold by many of these small businesses, help generate sales? If you aren't generating revenues, you probably aren't paying much in taxes in any event. So, how does all this cutting of business taxes generate sales to drive up revenues of businesses located in Michigan so these businesses can put workers to work so they can earn a living to feed their families? Why are we so confident that those businesses that can benefit from a tax reduction will in fact use the extra money to expand in Michigan and to hire workers? Why wouldn't they choose to invest it abroad or elsewhere if they can get a better deal? And, even if they do hire workers, what is to assure a reasonable wage? Seems like we are causing a lot of pain to a lot of people with a half-baked idea.....business as usual? As I said, I am confused and unable to follow the logic.
John Q
Fri, May 27, 2011 : 3:10 a.m.
"Next, businesses are not getting a 90% tax break,- you just made that up." Oh, my mistake. It's only an 86% reduction. When the new business tax goes fully into effect, businesses will have gone from paying over $2 billion in taxes to $292 million in taxes. So many businesses will be exempt from paying any business tax that only 1 in 10 of current business taxpayers will pay under the new corporate income tax. Those are the facts. "The idea that everyone who owns a business is a fat cat is ridiculous!" No more ridiculous than the idea that we can grow the economy by piling more taxes on seniors and the working poor so we can give business owners a tax break. It's not just those groups that are getting hit with a tax hike. Almost every individual tax payer who isn't a business owner is getting hit with higher taxes under Snyder's plan. Wait until people do their state taxes next spring and get slammed with a huge tax increase to see how many people are happy to see their taxes go up so that business owners can get a tax break.
julieswhimsies
Thu, May 26, 2011 : 6:54 p.m.
By all means, let's pave the way to keep corporations like Comerica happy. *Sarcasm font*
alternativeview99
Thu, May 26, 2011 : 4:15 p.m.
I see where people keep asking for an alternative to Snyder's tax reform. Well, here is an alternative. Let's plow purchasing power into the middle-class through tax breaks. This will provide demand for goods and services. Business will respond by figuring out how to create and sell those goods and services in the cheapest and most efficient way. Those businesses that are good at it will thrive under a "free market" system. Those that are inefficient will be eliminated. This expansion of demand will cause businesses to seek to hire people and create jobs with wages based on revenues created by demand instead of government subsidies provided by reducing the spending power of the middle class. Is this what is meant by "bubble up" economics? So, there is an alternative. But, business would rather have the subsidies with no accountability for their performance, giving it the lable of "free market enterprise". I don't see where subsidizing business is a "free market" system at all. I have to wonder if GM went down the tubes because the workers were the problem demanding what they considered a fair wage or the executives demanded millions for what was essentially poor decision making. It's a matter of perspective I guess. Oh, and if you are going to talk about tax rates and their fairness, please include in your discussion what the average ACTUAL rate of taxation is. At the federal level, the rich actually pay more like 18% on their income after all the deductions and other tax breaks they can take advantage of. And, some of them don't pay taxes at all! So, there are alternatives to taxing the middle class and offering tax breaks to business. Republicans just don't like them.
John B.
Thu, May 26, 2011 : 4:54 p.m.
Bingo! You are being way too sensible, though, for the 'usual suspects' here, I'm afraid.
alternativeview99
Thu, May 26, 2011 : 4:14 p.m.
I guess I am not as knowledgable as an economist, but I can't seem to get numbers to work. First, it would seem to me that the discussion should be about WAGES and not jobs. There could be plenty of jobs available at $2 an hour. But, who could exist on that kind of WAGE? Second, I don't see what the big deal is about attracting business with tax breaks. Businesses exist to make money. How do tax breaks, over the long term, do anything to encourage (in a free market) businesses to seek out the opportunities they should? How do tax breaks do anything but make it easier for businesses to exist. without any accountability for performance? And, how do tax breaks spur them on to finding creative solutions for the problems we, as a society, face today? Businesses, in seeking profits, will produce those goods and services in demand where there are customers willing and able to pay for them. Now, lets follow this logic. I take purchasing power away from the middle class and give it to businesses to produce goods and services for who? It won't be the middle class in Michigan. "Ah", you say. "We will produce goods to sell to markets elsewhere." But, here I also have a problem following the logic. Goods produced globally are cheap because labor is cheap and people live in poverty overseas in many of these countries that produce these goods. So, to sell goods overseas, we would have to keep the cost of labor down. And, I do appreciate that this meant we had to void union contracts and reduce the middle class to poverty by increasing the taxes they have to pay. So, I am having a hard time with the logic. It seems that what we are doing is redistributing wealth from the middle class to the very rich through a vehicle called "business".
1bit
Thu, May 26, 2011 : 11:04 p.m.
"Second, I don't see what the big deal is about attracting business with tax breaks." "I take purchasing power away from the middle class..." The MBT reform is frequently conflated as a "tax break" rather than elimination of double taxation. There will be minimal "purchasing power" taken away from the "middle class", however you seek to define the latter.
John B.
Thu, May 26, 2011 : 4:51 p.m.
Correct!
Sebastian
Thu, May 26, 2011 : 3:47 p.m.
...or, at the very least, Rick Snyder's Tax Reforms could be a delicious chunk of corporate welfare, stolen from the tables of the schoolkids, pensioners and working poor. It's a win-win! Trickle UP needs a fair shot, now that we all know trickle-down is a huge load of fertilizer, parked in a truck and ready to detonate.
Dennis
Thu, May 26, 2011 : 2:12 p.m.
Once again off the backs of the working people of Michigan. As the rich get richer and the poor pay the way.
Johnm
Thu, May 26, 2011 : 1:13 p.m.
To all the people bashing Gov. Snyder. Were any of you paying attention to the last 8 years of the prior administration? I have traveled extensively doing business in most every other state in the US. Before the GFC hit worldwide, Michigan was the most under performing state besides Louisiana, and at least they could point to Katrina as an excuse. The way that this state taxed businesses was driving a lot of them elsewhere. Anyone that lives in SE Michigan should know this. Pfizer bailing, Comerica moving to name a few. As far as tax buts creating jobs, you only have to go as far back as Reagen to know that tax cuts do work for job creation.
Rob Pollard
Thu, May 26, 2011 : 2:02 p.m.
How about you go a little less far back and look at GW Bush for the fact tax cuts don't work for job creation? Or perhaps I missed the boom times that were the 2000s.
TKA2
Thu, May 26, 2011 : 12:39 p.m.
Having attended the talk yesterday I can tell you that Mr. Johnson is no politiician. He is an economist. In regard to the business tax he stated he liked it because 1) It is clear, you can actually tell a business(person) what their tax rate is and 2) It does not pick favorites, by industry or otherwise, it is the same for all. (The latter seemed a slam at the movie tax credit which I love, but he also went on to say that the economy is far to unpredictable to favor one area over the next, with which I also agree.) I would add that in my opinion the biggest business tax probablem historically in Michigan is the advantage automotive and related companies have enjoyed over other businesses, it is one of the many reasons we ended up with all our eggs in the one basket of manufacturing and have now suffered for the last decade as globalization and modernization permanently reduced the workforce required to build things. This change addresses that tax problem. BTW this is the "same attack on working people" as the cotton gin, the tractor, and the steam shovel. Wake Up!! The most political thing I heard yesterday was that the budget in Washington is a total mess and without correction wil completely crash the economy. This is due to the cost of social medicine (medicare, etc.) which will rise forever unless corrective action is taken. Mr. Johnson made three points I will repeat: (1) The Republicans are wrong because they think taxes do not need to increase (2) The Democrats are wrong because they do not think spending must decrease and (3) The American people are wrong because they think they can have the same benefits without paying for it or changing at all. In regard to Gov Rick's taxing pensions, my opinion is: means testing on all programs is the only answer to medicare and social security, etc. As for all medical plans: also get ready for large deductibles...say $5,000 per person per year. Without single payer it is the only answer.
John Q
Thu, May 26, 2011 : 1:52 p.m.
The state could have had a more rational tax system without giving businesses a massive tax break. The argument that the tax system could have been streamlined is nothing but a cover for the massive tax break. The two don't go together. Businesses are get a 90% reduction in taxes. Everyone is getting their taxes jacked up. Justify that.
Greg Gunner
Thu, May 26, 2011 : 11 a.m.
More conservative whitewashing of direct attacks on the working poor and working middle class. The logic behind this is to discourage the working poor and middle class from voting. Republics realize that their only chance to win elections and control is to reduce the number of people voting in these elections. The 2010 turnout was low. When Republicans claim to have won with a substantial portion of the voting population, what they really mean is that they won over 50% of a turnout of less than 25% of elible voters. So the Republican mandate comes from roughly 13% of the voting age population, many of whom are now disappointed with the actual agenda being put forth. With the increased turnout generated in the presidential election of 2012, the Republican agenda has to be rushed in with all expediency to insure it gets in place before the people retake control of their government. Profits must be maximized at the expense of the reirees and working class before these people can regain control from the fatcats now running the state. One additional question for Governor Snyder. How many of those Gateway computers that made you so rich were purchased for school use? The same schools that you now are cutting back to the bone, forcing deficits with your funding cuts and then blackmailing schools into forced attacks on their employees wages and benefits in order to claim a few scraps of funding that never should have been taken away in the first place. And once they are in deficit, you can take over control by assigning a crony to further your destructive agenda.
Cash
Thu, May 26, 2011 : 10:11 a.m.
Well, the plan is good for COMERICA and the wealthy. Comerica is a corporate giant. The more money corporations have, the happier Comerica is. Comerica would not be happy if this plan benefited the middle class. They couldn't care less about the average Joe. They exist to serve corporate America. Period.
InsaneGeek
Thu, May 26, 2011 : 4:01 a.m.
Let's get a little perspective and look at things without political bias... Facts: $1.7 billion to cover for the year There are approx 3,922,000 people employed in Michigan, and there are approx 10million total people in michigan. Based on a paycheck every two weeks, means that if everything was equal the cost for the people employed would be a little over $16.00 per paycheck. The question to ask is this: what would help the Michigan economy more $16/paycheck to all 3.9 mill working people or $1.7 billion to a group of that is much, much smaller (there isn't one business for each working person we are talking 10x, 100x or more ratio of employees to businesses in the state). Adding opinion back in: Rick Snyder appears to be taking the same approach President Obama has taken. Obama said that tax breaks to businesses will put a dent in unemployment. <a href="http://www.bloomberg.com/news/2010-09-07/obama-to-propose-business-tax-relief-spending-to-spur-growth.html" rel='nofollow'>http://www.bloomberg.com/news/2010-09-07/obama-to-propose-business-tax-relief-spending-to-spur-growth.html</a> Obama tomorrow will announce a plan to expand a tax incentive to encourage business investment, an administration official said on condition of anonymity. He also will urge Congress to extend permanently and expand a research-and- development tax credit for businesses. Those two measures together would cost about $130 billion over a decade, according to White House figures. <a href="http://www.reuters.com/article/2010/10/29/us-usa-election-obama-taxes-idUSTRE69S1C720101029" rel='nofollow'>http://www.reuters.com/article/2010/10/29/us-usa-election-obama-taxes-idUSTRE69S1C720101029</a> The Obama administration made the proposal in September. It released a report on Friday outlining its benefits, including $150 billion in tax relief to businesses over two years. It would cover some 2 million small and large companies. "It'll put a dent in the jobless rate that we're working on right now," Obama said. "As we continue to dig out from the worst recession in 80 years, our mission is to accelerate that recovery and encourage more rapid growth," he said
chefbrian1
Sun, May 29, 2011 : 5:15 p.m.
Interesting numbers: 3.9 million employees x $16 per paycheck x 25 paychecks a year = $400 per person. (or $435 per person...$1.7 billion / 3.9 million) So what is the employee per employer/business ratio? 1:10 business to employee ratio = $4000 per biz (390,000 businesses) 1:25=$10,000 =(156,000 businesses) 1:50 =$20,000 (78,000 businesses) 1:100=$40,000 (39,000 businesses) Lets say that the businesses spent %100 of their tax cut on hiring (not likely) and that there is a 1:100 employee to employer ratio.... We are talking about creating 39,000, $40,000 per year jobs.
townie54
Thu, May 26, 2011 : 2:51 a.m.
Slick Rick,lets start by getting rid of all the cushy lifetime health care and retirement benefits that politicians get and put them in line with the general public.Then instead of you all traveling to mackinac island or any seminars you use a Live Meeting computer program.You can even see each others face on camera.No more flying to meetings and charging hotel and dinner tabs to taxpayers.We will have to be on a budget and so should politicians.All business's should have to do the same to show they earn tax breaks.That will be a good start
gild
Thu, May 26, 2011 : 1:54 a.m.
This is clearly nonsense. As everyone knows, people who have money are evil. They never contribute to the economy in any way -- they just roll around in piles of cash cackling gleefully, and any tax policy that doesn't involve confiscating all of their wealth and forcing them to wear hair shirts is morally wrong.
John B.
Thu, May 26, 2011 : 4:28 p.m.
Nice strawman, but we're not buying it, sorry. Try again. Use data if possible.
Roger Roth
Thu, May 26, 2011 : 12:40 a.m.
@ Dennis, truer words never written here. Someone tell me one good thing that the federal or state governments have done for the working class in the last, say, since Ronnie, that they haven't compensated for with some hidden or deferred price paid by the working class. There's no such thing as lower taxes. Not even the great economic minds that got us into this mess could figure out all the ways a government has to part you from your money. The only defense is to 1) resign from the rat race or 2) continually increase your earning while cutting your spending, period. Most choose the latter, but The Race is fast becoming futile. I'm waiting. Tick, Tock, Tick, Tock, Tick...
Thinkin' it Over
Thu, May 26, 2011 : 12:02 a.m.
"Trickle down" has never worked, and it never will. We're sick and tired of being trickled on! We've got to get rid of the greedy, self-serving manipulators of businesses that will not produce jobs, and will only take advantage of our tax cuts and run. As it stands, they have no obligation to create jobs for Michiganders while they take funds rightfully belonging to maintaining and improving our public schools. Our state cannot attract young people unless it provides quality education. John Q. has presented some excellent ideas in response to grye above, although I doubt s/he has bothered to read them. I would like to add the idea of making Michigan THE place to go for an affordable, high-quality college education. Michigan's young people are leaving in droves. We should make getting a diploma from our excellent public universities the most affordable in the nation, and the young people of America will flock to Michigan. The state that attracts and maintains the highest number of young people will ultimately be the most successful economically.
snapshot
Thu, May 26, 2011 : 3:28 a.m.
the theory of public servants continuing to take money from the taxpayers in the form of compensation until the taxpayers are broke and then continue to spend money they don't have while refusing to make any sacrifices hasn't worked too well either, now has it? It amazes me how many educators talk about the importance of education and then fail to even consider alternative solutions to fix a problem they know exists. You just continue to ask for more money when you should be considering how to utilize the funds that do exist in the best possible manner. You should also be devising strategies to get some of the incentive monies that Snyder is putting on the table for improving educational efficientcy. But that would be silly of me to think educators would be open minded and encouraging change that might not benefit themselves directly and immediately. Maybe there's a learning pill out there somewhere.
David Frye
Wed, May 25, 2011 : 10:35 p.m.
Typical A2Com pro-Snyder hype. "How long do you think it will take to see the benefits from Snyder's tax reforms?" The question assumes that there will be benefits. This is a push-poll, not a serious question. Will there be benefits? More important, who will benefit and who will be hurt, to what degree and in what ways? Those are the questions you should be reporting on. This is why I stopped subscribing to your rag and rarely read your "stories" on line any more. I hope you can get your rich friend Rick to pick up the tab, and I hope even more that Ann Arbor gets the good, critical newspaper it deserves.
John B.
Thu, May 26, 2011 : 4:44 p.m.
David, you're correct. I see that even using push-polling, the results are nearly 50% for "never." That speaks volumes....
John B.
Thu, May 26, 2011 : 4:26 p.m.
No, we mean one that doesn't parrot the U of M / Snyder line daily without doing any research whatsoever. It's pitiful sometimes.
gild
Thu, May 26, 2011 : 2:07 a.m.
By which you mean "a newspaper that dutifully parrots the liberal/union party line," no doubt.
Rob Pollard
Wed, May 25, 2011 : 10:06 p.m.
All right, I did a bit of research. Dana Johnson, in an article dated December 16, 2010, said that in 2010, Michigan's GDP growth likely trailed the nation by 1%. 2010 was obviously pre-Snyder. So in 2011, now with Snyder's tax cuts, according to the above story , Mr. Johnson believes Michigan will continue to trail national growth by 1%. In both years (2010 and 2011), he estimated national growth at 3-3.5% and Michigan's growth at 2-2.5%. He doesn't say anything about Michigan's growth accelerating in the future (e.g., 2012). Additionally in April 2010 (i.e., WAY before Snyder) he said the following: "Once the cyclical auto rebound tapers off, the state will likely underperform the national economy by about 1 percent a year." So now, in May 2011 with these great tax cuts soon to be in place, he STILL expects Michigan to underperform by - you guessed it - 1%. This is my problem. People talk in platitudes ("I think Michigan is really heading in the right direction" and Michigan is now more "attractive") but when you ask for numbers, "OK, how much more attractive? How much will our growth rate increase?" the answer seems to be missing. It's like we're cutting taxes to feel better, but whether it will increase employment and/or growth by a measurable amount, there are no numbers behind it. Dec 2010 article: <a href="http://www.mibiz.com/crystal-ball/finance/17023-comericas-dana-johnson-recovery-to-motor-on.html" rel='nofollow'>http://www.mibiz.com/crystal-ball/finance/17023-comericas-dana-johnson-recovery-to-motor-on.html</a> April 2010 article: <a href="http://www.mlive.com/business/west-michigan/index.ssf/2010/04/comerica_economist_sees_modest.html" rel='nofollow'>http://www.mlive.com/business/west-michigan/index.ssf/2010/04/comerica_economist_sees_modest.html</a>
Rob Pollard
Thu, May 26, 2011 : 2:06 p.m.
Snapshot, it's not a "numbers game" ; this is an economist. He literally deals in numbers all day long. This is his job. He should be able to say, one way or another, based on his decades of research and experience, what effect he expects the tax cut (not the tax simplification - that's a separate issue - you can do one without the other) to have in terms of numbers. Why is he confident estimating GDP growth (he literally does that every quarter for Comerica) but not estimating a change in GDP growth based upon the tax cut? That would have truly been helpful. Instead, he relied on general platitudes. I don't think he's an ideologue - I just think he should be trying harder and get specific.
snapshot
Thu, May 26, 2011 : 3:54 a.m.
funny how educators use the numbers game except when it comes to evaluating educators and their performance.
John B.
Wed, May 25, 2011 : 9:54 p.m.
Thank you for today's pro-Snyder propaganda.
15crown00
Wed, May 25, 2011 : 9:37 p.m.
how does the great RICK think the kids will be educated,communities will be safer from criminals,and fires will be put out?Things to ponder Rick as u travel between Lansing and Pittsfield Township on the taxpayers dime.
goingfast3579
Wed, May 25, 2011 : 8:27 p.m.
What Manufacturing jobs. We in Western Wayne, Washtenaw County. Have lost Manufacturing jobs that are worse then the Great Depression and Ypsilanti is down to before the 1900's. Is it not the banks that were bailed out first? This guy is retiring with his big profits or before charges are brought?
HaeJee
Wed, May 25, 2011 : 8:17 p.m.
How many financial bank executives do you know that is a Democrat? Not many....... So, no surprise that Dana Johnson would be promoting Snyder's cuts. Sorry, but banks do not have the middle class interests at heart.
grye
Wed, May 25, 2011 : 8:15 p.m.
Naysayers: Do you have a better plan that will entice businesses to come to Michigan? Do you have a plan that creates an environment that will allow businesses to grow and create more jobs? I haven't seen a single idea other than tax the rich and tax the businesses. Do you really think that will solve all our economic woes? Let's see some real "lefty" ideas.
John Q
Wed, May 25, 2011 : 8:45 p.m.
You might call these "lefty" ideas. I call them common sense. 1. Graduated income tax. Michigan's flat income tax means that people at the top of the income range pay the same percentage in taxes as a person struggling to make ends meet. 2. Business tax that charges all businesses a flat fee on up to $350,000 of income and then progressive tax rate above that amount. Businesses entities shouldn't get a free ride on state services by using accounting practices to zero out profits. 3. Elimination of laws that discriminate against people on the account of sexual orientation. 4. Blocking efforts to curb stem cell research in state universities. 5. Eliminate local tax abatements which allow for picking "winners and losers" and tax billions in revenues from schools, local governments and state government.
grye
Wed, May 25, 2011 : 8:35 p.m.
This is just more whining. Give me a plan that will turn our economy around. To do this we need more jobs. Is your plan to cut taxes on the public to they have more money to spend? How do you know they will spend it? This is the same answer the "left" says about lowering the taxes on businesses. Show me your plan.
HaeJee
Wed, May 25, 2011 : 8:20 p.m.
People have to have money to spend to promote the need for new businesses. If we are carry the tax burden and hurting for discretionary funds, where will the demand for new bsinesses come from? Where is Gateway now? Snyder is no Steve Jobs.
Grant
Wed, May 25, 2011 : 8:13 p.m.
The stockholders will feel great when the companies profit from the lower tax, because they will get larger dividends. The reason... the companies will simply not add jobs. Let's get real.
John B.
Thu, May 26, 2011 : 4:21 p.m.
gild: Baloney. Supply-side Business tax cuts don't create jobs, period. Never have, never will. That has been thoroughly proven over the past thirty years. You can't (i.e. shouldn't, unless you want to lower your profit or start losing money for no good reason) hire more people if there isn't enough demand for your products, and right now, there isn't. If you were to give tax cuts to the 98% of taxpayers that drive our economy via consumption, the vast majority of that would get spent in the economy. That would eventually create more jobs; taxcuts to businesses won't, haven't in the past, and won't in the future.
gild
Thu, May 26, 2011 : 2:05 a.m.
No, they won't "just add jobs" as a form of charity like some liberals seem to want. But businesses are always looking for opportunities for future growth, and future revenue growth usually involves creating jobs as well, whether directly or indirectly.
grye
Wed, May 25, 2011 : 8:39 p.m.
Can you tell the future? If the public is provided a tax break, will they spend the funds on products or will they just pay off bills or hoard the money? No one knows the answer. Something has to change. Hopefully this is the right answer.
chefbrian1
Wed, May 25, 2011 : 8:08 p.m.
Lets get to the point and stop debating theory here. Can anyone name me a Michigan business who plans to use their tax cut to create a job(s) in the state. If you have a business: Are you planning to use any/all of your portion of the $1.7 Billion tax cut to create a job(s) in the state? If not, what do you plan to do with your tax cut?
John B.
Thu, May 26, 2011 : 4:18 p.m.
gild: Baloney. Supply-side Business tax cuts don't creat jobs, period. Never have, never will. That has been thoroughly proven over the past thirty years. You can't (i.e. shouldn't, unless you want to lower your profit or start losing money for no good reason) hire more people if there isn't enough demand for your products, and right now, there isn't. If you were to give tax cuts to the 98% of taxpayers that drive our economy via consumption, the vast majority of that would get spent in the economy. That would eventually create more jobs; taxcuts to businesses won't, haven't in the past, and won't in the future.
gild
Thu, May 26, 2011 : 2:03 a.m.
Roll around in money cackling gleefully. That's the answer you were after, isn't it? Fact is, any business owner worth his or her salt can name half a dozen ways they'd like to expand if possible. Nearly all of those have a side effect of creating jobs in one way or another.
towny
Wed, May 25, 2011 : 8:05 p.m.
Thank You, Gov. Snyder for making the right tough difficult choices this state of Michigan needs.
Bones
Wed, May 25, 2011 : 7:50 p.m.
If Johnson thinks this is great for Michigans economic recovery. I wonder if they will see fit to move Comerica back to Michigan from Texas?
snapshot
Thu, May 26, 2011 : 3:21 a.m.
I guess you don't believe in learning from experiences, why do you think they moved in the first place and now that something is being done that could possibly encourage businesses to move back to Michigan, you are sarcastic, and obviously misinformed as to what constitutes good business incentives to create jobs and revenue which supports the tax funded public sector, including education. It's disappointing to me how closed minded educators are when it comes to understanding the basics of the economic viability of government.
BioWheels
Wed, May 25, 2011 : 7:40 p.m.
Your poll should include a recall option in it's selection. This governor is a disaster for the middle class in Michigan. He is by far the worst governor we have ever had in the State of Michigan. Recall Snyder now!
towny
Wed, May 25, 2011 : 8:08 p.m.
I believe we just got rid of the worst governor this state ever had in Granholm. But, we all the right to our opinions.
brightside
Wed, May 25, 2011 : 7:28 p.m.
How about some of that ACCOUNTABILITY we hear the governor talks so much about regarding public sector workers? Let's see incentives offered to businesses to receive tax breaks AFTER they've created jobs. We're still waiting for all those promised jobs from previous tax cuts to the wealthy and corporations. Hasn't happened yet. . .why does anyone think it will happen now? Recall Snyder, restore funding for education and local communities and save our state.
Rob Pollard
Wed, May 25, 2011 : 6:34 p.m.
Mike Soto, I don't want Snyder to fail - I just don't think tax cuts (which seems to be his be-all, end-all) paired with cuts to education are what it takes to get the state moving. When reporters have asked him, "What proof do you have that this tax cut will work and actually increase employment?" the answer he and budget director Nixon have seems to be, "Well, we just think it will." Even when pointed out that the Bush tax cuts essentially did nothing, it's still "Hey, trust us." The one part I give them credit for is reducing the complexity of the code (as most small business won't even be paying a corporate tax) because making it easier to operate (b/c there are less forms to fill out) by definition makes it easier to operate. But I never heard a good reason why the tax rate couldn't have been higher (say 7% instead of 6%) to reduce the massive cut to education and/or pensions, or there couldn't have been some other balancing (e.g., having a lower sales tax but putting it on more goods & services). Instead it was, "Tax cut for businesses with no proof it will do anything for jobs - sure! And we'll pay for it by asking 50+ retired folks and schools to cut back." Done and done. In short, they're relying on trickle down economics, which I think is foolish.
snapshot
Thu, May 26, 2011 : 3:15 a.m.
Rob, I hear a lot of opposition to the tax cuts for "small businessess" from proponents of education. No one mentions the "incentive" program Snyder put out there to encourage educators to improve their own systems and fiscal management. I'm also suprised that educators don't realize that small businesses employee 75% of the population and don't have fully paid healthcare plans or defined pension plans with retirement options after 5 years. I would think it's time for the educators to be educated on economic realities but it seems they are only open minded when it benefits themselves and not what's best for students and society. The simple fact is it doesn't matter how good the schools are if all the parents are losing theire homes, jobs, and worrying about where there next meal is coming from. Snyder is doing all the right things and those in the know recognize it, those who want to hang on to the wasteful old ways for their own good are in opposition.
Rob Pollard
Wed, May 25, 2011 : 7:57 p.m.
Interesting reply. Any proof that a 7% tax rate (as opposed to 6%) would have caused our unemployment to go back up? Notice that it has gone down 4% over the past year, and this tax cut hasn't even taken effect yet. Are you saying this tax cut is so magical GM, Ford, etc (i.e. the big companies whose massive cuts drove the unemployment rate up and now, through their and their suppliers hiring, are now bringing it back down) couldn't even wait for Snyder's big cut? Or maybe it's just small changes in tax rates don't make much of a difference, if any, in hiring? Of course, Nevada, the state that now has the highest unemployment rate in the nation boasts "the lowest overall tax rate in the nation" (no personal income tax, no corporate tax, etc). Perhaps you can tell them they need to cut their taxes even further, as having the lowest tax rate isn't low enough! <a href="http://www.insidervlv.com/taxgeneralinfo.html" rel='nofollow'>http://www.insidervlv.com/taxgeneralinfo.html</a> Michigan's unemployment, <a href="http://www.google.com/publicdata?ds=usunemployment&met_y=unemployment_rate&idim=state:ST260000&dl=en&hl=en&q=unemployment+rate+michigan" rel='nofollow'>http://www.google.com/publicdata?ds=usunemployment&met_y=unemployment_rate&idim=state:ST260000&dl=en&hl=en&q=unemployment+rate+michigan</a>
djacks24
Wed, May 25, 2011 : 7:13 p.m.
"But I never heard a good reason why the tax rate couldn't have been higher (say 7% instead of 6%) to reduce the massive cut to education and/or pensions" Obviously your goal would be for Michigan to regain the spot it lost as the state with the highest unemployment rate in the country.
Lionel Hutz
Wed, May 25, 2011 : 6:33 p.m.
I have heard Dana Johnson speak and I can assure you that he is no conservative ideologue. The fact is that the old business tax structure was confusing and didn't provide any incentive for small businesses to set up shop and stay here. For too long, Michigan has seen its share of startups leave this state. Now, at least tax complexity will no longer be an issue.
mitch
Wed, May 25, 2011 : 6:23 p.m.
this guy got his head in the sand!!!!!!!!!!!!
mitch
Wed, May 25, 2011 : 6:19 p.m.
i'll be signing the recall to get rid of this engler/synder type!!!!!!!!!!!!!!!!!
Mike Martin
Wed, May 25, 2011 : 6:30 p.m.
Good for you! With any luck we will get another Granholm type!
chefbrian1
Wed, May 25, 2011 : 5:47 p.m.
"Johnson cited.....state and local government cutbacks as reasons for the slow recovery rates." Cutbacks to state and local government...now why did we have that you suppose? Um...could this be because of the same business tax reform, which gives away $1.7 Billion in state revenue, which included taking $470 from every k-12 student in the state, and also takes away needed funds to help state and local governments? "He said job growth in Michigan has been stronger than national growth due to Michigan's large manufacturing sector, which "led the way" for job increases in the past year." Could this boost be from...I don't know...bailout of the auto industry through loans and not tax cuts? A Detroit Free Press article (link below) says that Crysler just paid back its loan 6 years ahead of schedule. <a href="http://www.freep.com/apps/pbcs.dll/article?AID=2011110524029" rel='nofollow'>http://www.freep.com/apps/pbcs.dll/article?AID=2011110524029</a> If Snyder offered $1.7 billion in Loans to Business, that would be something. The money would come back and businesses who actually needed capital could get it. The state could even profit off of the deal, but no...a revenue gutting tax give away makes more sense, right? Tax cuts don't work. Check out the comments on the subject. <a href="http://www.annarbor.com/business-review/so-the-michigan-business-tax-is-dead-will-it-create-jobs/?plckFindCommentKey=CommentKey:0b70ab59-0296-4883-9cf1-d6a40725f04e#comments">http://www.annarbor.com/business-review/so-the-michigan-business-tax-is-dead-will-it-create-jobs/?plckFindCommentKey=CommentKey:0b70ab59-0296-4883-9cf1-d6a40725f04e#comments</a>
Townie
Wed, May 25, 2011 : 9:50 p.m.
This latest piece of corporate welfare was also designed to make measurement of its success or failure impossible to determine. Reporting or statistical requirements? NONE. That's by design so you can claim it created millions of jobs but not have to actually prove it. And if you can't disprove it, then it's a fact! Brilliant. Unfortunately, the latest piece of welfare will be pocketed by the owners, not the people who actually do the work so the rich will get richer and the poor poorer. Just as the Republicans want and intended.
djacks24
Wed, May 25, 2011 : 7:10 p.m.
"Could this boost be from...I don't know...bailout of the auto industry through loans and not tax cuts? " "A Detroit Free Press article (link below) says that Crysler just paid back its loan 6 years ahead of schedule." No, its because both GM and Crysler filed bankruptcy which is what they were going to do anyway. The government loans just delayed that for 3 months.
Mike Soto
Wed, May 25, 2011 : 5:25 p.m.
Liberals want Snyder to Fail and they have yet to offer a solution. As a moderate myself when I see the Michigan EITC that has only existed for 3 years and only 20 states and shrinking states offer it. EITC is an incentive to earn less. So eliminating it is not a tax increase thats just not true because it isn't earned... Pensions on the other hand tough sell but the fact remains politicians in the past were to afraid to deal with it and so Michigan was the most lucrative state for pensioners, only a few states dont tax pensions and the other states that dont still have other high taxes elsewhere. Snyders approach was looking at the long term and not a short term fix. 4.35% that everyone has to pay even seniors should apply to those that can. Not everyone has pensions mostly just Public employees and others. Plus if I have to pay out of my 401K well others should have to as well its only fair. Also to note Snyder's plan eliminated tax credits to big biz and it closes the tax loop holes. Reality is some Big Businesses may pay more the people who benefit are small business owners who have flocked out of Michigan because of the MBT. When looking past all the negative rhetoric the plan is smart and its right. the nasty rhetoric only exists because the Dem party had recently experienced a beating so of course they will do what ever is necessary to gain ground
PattyinYpsi
Thu, May 26, 2011 : 12:42 p.m.
You are right on the money, Mike! We liberals don't care about our jobs, our taxes, our retirement, or our communities--we are just emotional junkies whose major concern when we get up every morning is whether Snyder will fail! And we base all our decisions on that one guiding force in our lives. When I'm at Meijer's, sorting through grocery coupons and trying to decide whether I can afford fresh tomatoes or fresh oranges--because I can't always afford both--I ask myself, "Which purchase would ensure that Snyder fails?" When I'm considering which healthcare tests and procedures I can afford (because I am self-employed and have to pay for my own health insurance, and I have a big deductible), I ask myself this question: "Would a mammogram or a complete blood panel be most likely to make Snyder fail?" When I try to work out when, or if, I will be able to retire, and if so, how much longer I will have to work to make up for a new tax on my SEP-IRA, I include in that calculation how many extra years of work it will take to ensure that Snyder will fail. When I look around at the challenges facing my community, and think about what I can do to help, my main consideration in choosing a charity or a volunteer possibility is which one will make Snyder fail. Liberals, like almost everyone else, are concerned with rebuilding our cities and improving the quality of life for ourselves and our neighbors. It's called "projection," pal.
gild
Thu, May 26, 2011 : 2 a.m.
@BioWheels: What about Snyder's income tax is not "shared"?
BioWheels
Wed, May 25, 2011 : 7:47 p.m.
Mike If you are a moderate, then we are all in trouble. What most of us want Mike is shared responsibility, to quote your buddy Rick. A long term fix would be a personal income tax that is "shared".
John Q
Wed, May 25, 2011 : 7:06 p.m.
"EITC is an incentive to earn less." This has got to be one of the stupidest things I've ever read here. "When looking past all the negative rhetoric the plan is smart and its right." "Smart and right" for businesses who get a 90% cut in taxes. Everyone else gets their taxes increased.
alan
Wed, May 25, 2011 : 6:38 p.m.
That sounds a bit crazy. I'll purposely earn less so the state will give me money?
Jake C
Wed, May 25, 2011 : 5:38 p.m.
You really think that there's poor people out there thinking "Hmm, I could go out and earn another $10,000 if I worked really hard, but I've got this sweet EITC so I'm just gonna sit on my butt and wait 12 months for that tiny tax rebate"? Really? For a single person with no kids earning the minimum wage working full-time, the EITC gives a $0 benefit. For a marriage couple both earning the minimum wage, $0. Single person with one kid, $557. Married, $0. If anything, the EITC is an incentive for poor people to earn more money to get a higher EITC credit. Just check out this spreadsheet, straight from the government, and tell me why I would ever want to earn less money instead of more money: <a href="http://www.michiganeic.org/Michigan%20EITC%20Table%202010.pdf" rel='nofollow'>http://www.michiganeic.org/Michigan%20EITC%20Table%202010.pdf</a>
Dennis
Wed, May 25, 2011 : 5:20 p.m.
If the Banks like it, it can't be good for the middle class. It only means more profits for the bankers. Tax cuts for business have NEVER led to job creation, only increased profits. This goes all the way back to the "Great Depression". Don't take my word for it read up on it.
Roger Roth
Thu, May 26, 2011 : 11:02 a.m.
snapshot, a job has to be a little more than some place to while away a few hours of your spare time.
snapshot
Thu, May 26, 2011 : 3:02 a.m.
Hey Dennis, I understand the animosity towards the banking industry but to put them all in the class of "opposing the middle class" you seem to forget that many of those employees are "middle class". The banking industry also operates on an average of 50 percent compensation to revenue ratio that includes the huge executive bonuses whereas the "public sector" operates on an average of 80 percent compensation to revenue ratio. The banking industry also creates jobs and generates revenue while the public sector creates no jobs or revenue. Be careful about biting the hand that feeds you.
alan
Wed, May 25, 2011 : 6:37 p.m.
Kennedy reduced the top tax bracket on individuals from 91% to 70% as part of an overall demand-side tax reduction. What we've seen for 30 years is supply-side tax reduction (trickle down). That has been shown not to work.
Will Warner
Wed, May 25, 2011 : 5:42 p.m.
I'm no expert, but it is commonly believed that the Kennedy tax cuts led to job creation. It's not much, I know. But you said "NEVER."
Marshall Applewhite
Wed, May 25, 2011 : 4:30 p.m.
You should included the options "RECALL SNYDER!!1!!" and "No Fat Cats!!1!!" just to see if these people are actually reading.