What is the tax and business incentives climate in Michigan? How does it affect our economic development abilities?
Tax and business incentives in Michigan are greatly overdone and have expanded to such a degree that they now include refundable tax credits. But exhaustive research has shown that, at best, state and local development efforts have no impact on real economic growth. First, and in the broadest sense, research from 2002 indicates that state and local units of government expend about $50 billion annually on business incentives with no apparent impact. In your folder is a META review of the literature titled “The Failure of Economic Development Incentives.” A META review is essentially a review of reviews of scholarly literature on a particular topic. This review encompasses a “massive” amount of research literature and concludes that there were “theoretical, empirical and practical [reasons] to believe that economic development incentives have little or no impact on firm location and investment decisions.” Second, it does not appear that Michigan has fared any better. In 2005 I published
Related Questions
- The Cabinet for Economic Development report the number of jobs that have been created because of tax incentives. Isn’t that a good thing?
- What is the tax and business incentives climate in Michigan? How does it affect our economic development abilities?
- For a developing country like Philippines, how tax cut would affect business investments or economic growth?
