Posted by 30 July 2018
Ask any politician what his or her top priority is, and you’ll likely get the answer of “jobs.” Michigan legislators are no different. In their quest to create jobs in the state, they passed a budget that contains millions of dollars in tax credits for businesses. Some question whether these subsidy programs are a good way to create jobs, however.
In the state budget passed in late June, legislators included $162 million in businesses subsidies. These are mainly tax credit programs, which provide a refundable tax credit for businesses. These refundable credits are given to a business regardless of a business’s tax liability, which means the state could provide a direct payment to a company that qualifies.
The $162 million approved this year is not the total amount of Michigan business subsidies that are authorized for the coming fiscal year. Thanks to authorizations that occurred in previous years, the state can hand out $644 million to businesses this year.
Supporters of these subsidy programs say that they are necessary to create jobs in Michigan and attract high-paying jobs. They say that some industries just won’t locate in the state without them. Critics counter that most businesses create jobs without subsidies. These subsidies, they say, are merely a handout of taxpayer dollars to a few favored corporations. These critics point out that the money spent on subsidies could be spent on other government services or returned to taxpayers.
Do you support state programs that provide subsidies to businesses?