Effective business tax incentive programs are imperative when a state is in economic decline, when its business tax burdens are considered uncompetitive for many industries, or when state budgets are strained. Michigan suffers from all three of these conditions. It can afford to pursue only the most effective tax incentive programs.
Unfortunately, there exists no comprehensive assessment of the effectiveness of Michigan’s tax incentive programs. The purpose of this report is to fill much of that gap, first by creating a systematic inventory of Michigan’s tax abatement programs (see our first report here), and second by evaluating the available evidence of their effectiveness in attracting and retaining businesses.
The Michigan Education Association and National Education Association commissioned this report to improve the quality of the debate on business tax incentives. The report was completed by the independent consulting firm of Anderson Economic Group, LLC, which has considerable expertise in business tax policy, tax incentives, and state tax burden comparisons.