[magellan]

Originally Posted by odinloki1

" Its not a business owners job to hire people, its their job to make money"

I hear this from the righties all the time. By that logic, giving them more money by shifting the burden to the citizens will not do any good for employment. Without creating more consumers to increase demands for goods and services provided by small businesses, there will be no subsequent increase in jobs.

Yes the tax code needs fixing and simplification. If this means a shift in burden to lesser income citizens, which it seems like it will, then the economy in Michigan will still remain stagnant.

Exactly, the primary goal of a corporation is to maximize profits for shareholders. This is almost always the direct opposite of hiring more people.

Polls that have been done of CEO's show that, when thinking about expanding or setting up shop in a particular State, the tax rate is way down the list. Quality of a trained workforce, quality of life (so that they can attract the best talent), available property, labor costs, infrastructure (electric grid, rail, highways, high speed internet, etc) usually ranks WAY higher. Most large companies figure there are ways to minimize their tax burden one way or another, no matter what it is.

[actinic]

Originally Posted by odinloki1

Yes the tax code needs fixing and simplification.

Just read this to see just how bad the state's tax code is (loopholes favoring Meijer, Michigan Int'l Speedway, etc) and why the governor favor's replacing MBT with a flat 6% rate:

A snippet ...

'But lawmakers and then-Gov. Jennifer Granholm discovered that -- to make the new tax palatable to an array of powerful interests -- many of the old loopholes (exempting small business, for example) had to be transplanted. Along with a whole new set of loopholes and exemptions for specific enterprises that made the case that they would be bankrupted by the new tax without them.

To make matters worse, Granholm and the Legislature panicked when the public noisily rejected another aspect of 2007's tax reform -- expanding the sales tax to services. It was repealed before taking effect, and replaced with a 22% surcharge on the MBT.'

Snyder's disdain for Michigan Business Tax goes beyond film incentives | Detroit Free Press | freep.com

[sunnyandcloudydays]

Not sure what the tax rate is up in Michigan but stay positive. This economy has thrashed more places than just Michigan. Seems lately there is a sweeping momentum of reducing tax rates for states to attract business. I have watched this issue closely and totally agree with a previous poster about true job creation. An employer will look at much more than just a tax rate. For example you have company A who relocates to Timbuktu well in Timbuktu they have no water, the workforce is very limited as the area has no universities to draw new talent , shipping is high because the company is not served by railroad or major highways and emergency service is scarce because the fire dept is all volunteers. Lets hope and pray this whole economy picks up speed. All the political heads both repubs and democrats and the media are sleze balls, and this is where this talk is coming from. Michigan is a great state and beautiful and has plenty of resources a business is looking for it will rebound..

[michigan83]

Exactly, the primary goal of a corporation is to maximize profits for shareholders. This is almost always the direct opposite of hiring more people.

Maximizing profits is often accomplished through growth, which usually requires the hiring of people. But a company will only expand if the prospects for growth appear favorable. A company will be leery of expanding in a bad business environment.

If your theory was true, companies would always stay small. I think you are analyzing the way that companies act during a recession and applying it to business in general. Companies don't want to hire if there is a lot of uncertainty (which there is). How did the U.S. economy get to be as enormous as it is? It's not because the government forced companies to hire people when they had "extra cash". They grew and hired people when it made sense to do so. Right now, it doesn't.

[magellan]

Originally Posted by michigan83

Maximizing profits is often accomplished through growth, which usually requires the hiring of people. But a company will only expand if the prospects for growth appear favorable. A company will be leery of expanding in a bad business environment.

If your theory was true, companies would always stay small. I think you are analyzing the way that companies act during a recession and applying it to business in general. Companies don't want to hire if there is a lot of uncertainty (which there is). How did the U.S. economy get to be as enormous as it is? It's not because the government forced companies to hire people when they had "extra cash". They grew and hired people when it made sense to do so. Right now, it doesn't.

Most corporate growth is through acquisitions. Maybe we should take over some neighboring states.

I know what you're saying, but as an old boss of mine used to say, "Save $1 and that entire dollar goes straight to the bottom line. Sell $1 worth of product and only about $.06 goes to the bottom line."

[michigan83]

I know what you're saying, but as an old boss of mine used to say, "Save $1 and that entire dollar goes straight to the bottom line. Sell $1 worth of product and only about $.06 goes to the bottom line."

I think I worked for a boss with a similar mindset. There were only six employees total, and he was very content to keep his business small, keep his debt low or nonexistent, and he didn't go after sales just for the sake of making sales. He was never going to get rich or "make it big", but he lived a comfortable middle-class life and enjoyed what he did. It's not the usual approach, but I think there is some merit to it!

[SadieMirsade]

Originally Posted by tuebor

OP: No, yes, and maybe.

No: the GOP has been telling us for 30 years that if we just cut taxes, subsequent growth would solve all our problems. It hasn't worked. The rich took that money and spent it on investments overseas (which took jobs from Americans), speculative bubbles (and then went crying for bailouts when the bubbles burst), and corrupting the political process. Meanwhile, middle-class wages have stagnated and many blue-collar jobs have disappeared. Why is anybody still taking this "supply side" crapola seriously?

So true.
I'm not even rich, and I'm investing overseas. With the dollar being dragged down, the economic growth looking bleak, real estate tanking, I've decided to invest elsewhere.
And when I do have some extra $$$$, I like to buy "nice things", and travel.
And most of that nice stuff is now made overseas.
If not in France, Italy and Spain, then in China, India and Turkey.
Over the last 10 years, the world's been transformed. REAL money has been made and invested elsewhere. REAL growth is happening overseas.

While the US pi##es money away on wars and armaments, a "Mickey Mouse" country like Turkey is investing in HIGH SPEED rail, GeoThermal energy, education, new highways.
You name it, they're on to it. They're not waging no one else's wars.
Neither is Brazil, nor China, nor India, nor Indonesia.
Brazil is also modernizing its infrastructure. And so is China. And Russia. Good infrastructure, SOLID government investment, means GOOD BUSINESS.

Anyhow, Sweden has a huge tax rate. So does Denmark. Heck, rich Danes ride their bikes to work. They live in teeny weeny apartments. Their cars cost more than twice of what they cost in the US. Yet, even without their gas guzzlers and mega-mansions, they're one of the most successful, healthiest and happiest nations on this earth.
And they're not tanking. Their capitalists are still doing their thing. They're still motivated to make money, even though their profits may not be as high, and they probably don't live in 10000 square foot mansions, with a four-car garage and a 4000 square foot basement.
They are TAUGHT to moderate their greed, to restrain themselves. Frivolous spending and ostentatious living are a no-no among them Vikings.
I want to invest and make money, but why should society guarantee me a luxury lifestyle on a mickey mouse budget. And that's exactly what's been happening, Americans, including the business class, have been living on borrowed money, and expect every investment to guarantee them a luxury lifestyle. By world's standards, a 2500 square foot house, with a 1500 basement, 2-3 cars in the garage....is a luxury lifestyle.

[mike0618]

Any company that builds in a depressed city ie detroit, flint, saginaw...etc if 70% of your workforce lives in that city then no property tax as long as your workforce stays at 70%.

Flat comsumption tax. No state income tax. Push michigan more for tourism. Pure michigan is already going that way.

Half off college debt if you reside and work in michigan for 10 years and graduated from michigan college.

All college debt waved if you start business in michigan that employs 30 plus workers for at least 5 years.

[zthatzmanz28]

I thought part of the economic problem was wages being too HIGH because of UNIONS? How will cutting bisiness taxes increase wages that are all ready considered too high?

[JimmyInGreatLakes]

Originally Posted by zthatzmanz28

I thought part of the economic problem was wages being too HIGH because of UNIONS? How will cutting bisiness taxes increase wages that are all ready considered too high?

Two parts, Private and Public:

Cost of doing business for PRIVATE companies was said to be too high because of union wages in certain sectors, probably a large factor as foreign auto manufacturers decided to place facilities in Right-To-Work states. High cost of union labor and legacy benefits (retirees) helped push Big 3 towards bankruptcy and major loss of jobs for Michigan. New hires at Big 3 now making half the wage of current workers.

Public sector wages (typically unions) and benefits are said to be out of line with private sector salaries helping to cause a gap between available revenues and expenditures (largest % for schools is employee compensation).

I'm not sure the initial goal of cutting business taxes is to increase wages at existing companies. I believe the initial goal will be to attract companies and bring in jobs, whatever they might pay. As one poster said, Snyder hasn't really got into details about job creation. Most he has said was that he wants to improve the "business climate" which IS pretty dismal (I believe ranked 48th in the nation in one survey).