Gov. Gretchen Whitmer and other Michigan Democrats are praising a new scorecard which ranks Michigan as a top-10 state. In the meantime, they’re pursuing policies which would harm the state on those rankings.
CNBC published “America’s Top States for Business 2023.” The methodology isn’t well explained and the category weights and metrics are fairly arbitrary. Michigan also scores points for its massive amounts of selective subsidies, which are not good policy and not well correlated with business and job growth.
Still, the overall results are generally in line with other business scorecards. The ten states at the top of the rankings are North Carolina, Virginia, Tennessee, Georgia, Minnesota, Texas, Washington, Florida, Utah and Michigan.
Notably, four of these states have no income tax. Eight out of 10 of them are right-to-work states. Low taxes and being a right-to-work state factor into these rankings; both are categories Michigan will do worse on next year because of policies pursued by the governor.
Michigan has repealed its right-to-work law, a change that will go into effect in a few months. State law from a previous Legislature also cut Michigan’s income taxes for 2023. The law is clear that this should be a permanent income tax cut, but the Whitmer administration is arguing otherwise and trying to force a tax hike next year.
Most Michigan businesses pay the state’s flat income tax rate, which has declined from 4.25% to 4.05% this year. The Whitmer administration is ignoring the clearest reading of the law in order to hike the tax rate next year.
Both the hike in taxes and the repeal of the state’s right-to-work law will harm Michigan’s rankings by this measure. If Michigan lawmakers want a friendly place for business and individuals, they have some good examples to follow: Most of the states ahead of us in the rankings have shown the path to a strong economy.
It’s weird to see Whiter promoting the state’s business friendliness when she’s making it worse.
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