Michigan League for Public Policy: Enough is Enough: Business Tax Cuts Fail to Grow Michigan's Economy, Hurt Budget

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Cutting business taxes has not been an effective way to grow jobs and the Michigan economy as promised. This is particularly true when combined with increased taxes on individuals, disproportionately affecting low- and middle-income people and families. In 2011, the Legislature and governor gave businesses a generous $1.6 billion tax cut by repealing a business tax paid by all types of businesses and levied on gross receipts and income, and replacing it with a flat 6% income tax on C Corporations. At the same time, the state raised taxes on individuals by about $1.4 billion. Instead of business tax cuts, we need investments in education, transportation and infrastructure, local communities and job training to create an economy that works for all in Michigan. The current road funding dispute and other budget dilemmas were caused by these business tax cuts, and Michigan has not reaped any economic rewards from them. 

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