Tuesday, October 18, 2011

MEDC to Seek More Money for Tax Incentives

Well, duh.

Sometimes the lede at Gongwer is enough.

The money Michigan will have to commit to future economic development incentives will depend on the nature of personal property tax reform, but officials are looking to increase the initial $100 million appropriation, Doug Rothwell said Monday.

In an interview with Gongwer News Service, the chair of the Michigan Economic Development Corporation's Executive Board and president and CEO of Business Leaders for Michigan said it's unlikely the current appropriation will be adequate enough to compete with other states in years to come.

This was all very predictable (see this post from May that nailed it), and will probably go unnoticed by a media that made it a point to trumpet Snyder's claim that we need to stop picking "winners and losers". Public now thinks that special tax breaks for companies have been eliminated (although we are getting another MEDC release today, and those are probably causing some cognitive dissonance out there), and chances are Republicans are now going to work to start putting back other breaks when and where business owners demand them.

One example is the cry from developers over Renaissance Zones, previously reported in Muskegon, and now being heard in Grand Rapids. These guys are screaming mad that they now have to pay income taxes on this property, so Republican Sen. Dave Hildenbrand has introduced legislation to restore the credit to those "who already live in Renaissance districts or anyone who purchases a home before 2012."

But that's it, promise. No, really. Until they demand more...

I've always been in favor of targeted incentives. I've got a street full of inner-city property a block away from me that once was abandoned buildings and empty polluted lots, and is now teeming with restored buildings and new businesses - thanks to brownfield, historic, and MEDC tax credits. It wouldn't have happened without them.

The problem I have with this now is that we have eliminated credits for individuals, such as the EITC, and raised taxes on people in other areas - while businesses have received a hefty tax cut, with more on the way, and will probably see all their tax credits restored in the long run as well. It simply becomes another way to shift the tax burden to citizens, and usually it's shifted to those that can least afford it.

Leave it to the Republicans to take a good thing and pervert it into something that leaves a bad taste in your mouth.