Monday, July 27, 2009

Cassis Wants Business to Reveal Private Tax Information to the Government

Wow. For someone that claims that government needs to "get out of the way" of business, that calls for government regulations and rules to be relaxed, that embraces the Mac Center/Bush Republican "free market" theories will all her heart, suddenly Nancy Cassis is all about getting business to reveal their private tax information and strategies to the government... even to the point of breaking tax law.

That's quite a switch, wouldn't you say? And what a chilling message that sends to any business that might not want the details of their strategies shared with the competition. Seems we have created too many jobs this year with the MEGA credits, and Cassis needs to put the brakes on that, pronto!, so let's throw up some more government red tape...

Cassis has drafted legislation that would require the Michigan Economic Development Corporation to disclose more information about companies that get MEGA credits. Among other things, she'd like to know if companies that get the credits would really go somewhere else without them.

Greg Main is the president of the Michigan Economic Development Corporation. Main says he has that information, but he can't share it.

"Because our lawyers tell us if we did that, then we are violating the tax laws that say tax information is a private matter," says Main.
MEDC does at times announce the states and countries that we beat out in competition to land these companies/jobs - and let's face it, the Republican recession has created the current game of shopping around for the best deal that states can offer - but to reveal the details in a government report for all to see? Not only that, Cassis also wants to create more government involvement by requesting that these highly detailed reports are presented to just about every committee you can think of.

For example, she wants the authority to include more information in its annual report to the Legislature, such as the number of jobs created or retained in any year that a credit is applied and the total value of tax credits a company receives for that year and all previous years, as well as the company’s actual investment.

Cassis’ Senate Bill 71, passed unanimously by the Senate in February, would require such additional information and would also require the authority to report on its activities to the chairs of the Senate Appropriations and Finance committees, the House Appropriations and Tax Policy committees, and the directors of the Senate and House fiscal agencies.

Under the bill, the auditor general would review the annual MEGA report to the Legislature and would include comments with the report before the authority could submit it. Cassis’ bill is before the House Committee on New Economy & Quality of Life, chaired by Clemente.
New rules and regulations for business during a time of extreme economic crisis. Who would have imagined that this idea would come from a Senate Republican. These credits have been in place since the mid-90's, interesting that this becomes an issue now, isn't it?

Greg Main of MEDC says that Michigan is "unilaterally disarming ourselves" is the fight to draw business to our state. MEDC has 70 projects in the pipeline that are now being put on hold until this issue is resolved, and "a majority of those projects could go elsewhere if companies have to wait until January when a new allotment of MEGA credits becomes available." How many jobs will the Senate Republicans cost us with this request for more government involvement in business matters?

Even the Macomb Daily agrees that Cassis is "blocking" this legislation to push her own personal agenda of "old school" tax cuts, and they are urging that the Senate move this legislation. For a recent example, without these credits, we would not have landed the GM small car plant for Orion. It probably would have gone to Tennessee.

It's rare that Gov. Jennifer Granholm trumps Senate Republicans on matters relating to pro-business policies and creating jobs.

But we have to side with the Democratic governor in her push for additional state tax credits that are used to lure new companies to Michigan. So far this year, the incentives wielded by the Michigan Economic Development Corporation have allowed the MEDC to facilitate projects that will create up to 62,000 jobs, plus 161,000 spin-off jobs.
They also bust the Republicans on their hypocrisy when it comes to tax breaks. Bravo.

The bill that would expand the credits passed the House in June but in the Senate it's become a budget issue, with Republicans saying it will cost the state precious revenue.

That's an interesting critique. It's revealing that the same lawmakers who try to discredit the MEDC are quick to protect obscure tax loopholes for certain industries.

If we are going to put people back to work in this state, then the Senate needs to get to work on this bill.
The Mac Center is going to release a report this week attacking MEDC. The timing of that report is also "interesting" - almost as if they knew this was coming.

Can anyone think of a reason why the "free market" Republicans would want to slow down job creation, besides Nancy's freakish obsession with killing Michigan's film industry? You can probably guess the motivations here based on campaign themes that have already been established amongst the Republican candidates for governor. They need things to be "bad" in Michigan - it's all they have to run on. After all, you don't hear them offering up any new ideas of their own.

The House should pass Cassis' bill ASAP, provided it doesn't break any laws. More transparency is not necessarily a bad thing - let's just hope it doesn't scare away business that would rather keep their information private.