Past Recessions Limit Michigan's Mobility In State Business Tax Burden Rankings

Past Recessions Limit Michigan's Mobility In State Business Tax Burden Rankings

A research firm based in East Lansing hopes they've given substance to the study of what states create the best tax environment for their business community.

Anderson Economic Group's fourth edition of the Business Tax Burden Rankings finds Michigan 44th among all states and the District of Columbia.  Alex Rosaen, their Director of Public Policy and Economic Analysis said that's based on fiscal year 2011 information. Since then, the Snyder Administration and legislature have made changes. "The corporate taxes and property taxes, especially property taxes on business equipment are the main changes that we've made."

These adjustments are not likely to pull Michigan onto the high side of these rankings.  Rosaen said the state's unemployment insurance tax is the highest in the U.S. "We've had a longer period of high unemployment, layoffs and so forth than other states since we didn't recover as strongly from the 2001 recession." Michigan also funds local government through property tax and has considerable reliance on sales tax to fund programs. Rosaen said those are among the eleven tax categories their studies address.

Delaware, Oregon and Utah have the top three spots in this assessment, Wyoming, North Dakota and Alaska are at the bottom of their list.  Rosaen said they made a concerted effort to stay out of determining what a "good" or "bad" business tax was. "We objectively look at how much tax did businesses actually pay, what is the dollar amount and divide that by their ability to pay, their operating margin. We think this is a really helpful perspective."


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