Revenue from corporate income taxes has fallen 50% since 2008.

Public investment is the single best way to build shared prosperity. But instead, over the last half century, Michigan and states across the country have chosen a strategy of austerity, underfunding essential resources to pay for corporate tax cuts and other giveaways that don’t build better communities.

The result? Less corporate income tax revenue that would otherwise be invested in where it’s needed most— Michigan’s schools, infrastructure, and people— each of which have been short changed under the 'trickle down' economic policy of recent decades. Specifically, since the repeal of Michigan's Business Tax in lieu of the new, lower-tax CIT legislation, Michigan collected less than 50% as much corporate tax revenue in 2019 than in 2008. 

Along with cuts in other revenue resources in recent years, Michigan is now significantly below the national average in revenue per capita. With it has come dramatic negative declines in outcomes for Michiganders across the board.

To date:

• Michigan's median income has dropped dramatically relative to other U.S. states, falling behind 23 other states to 32nd in the country.
  
• Michigan is one of only 13 states with declining literacy, and
• The state's infrastructure is rated a D overall. 
  
  
  
  Corporate tax cuts have harmed,
  not helped Michigan.
  
  We need to move the state in a new direction that can set the course for a sea change across the country. By prioritizing public investment in Michigan's people and communities instead of insulating corporations from contributing their fair share, we can drive lasting economic growth and shared prosperity.
  
  

Our 3-part path forward:

1. Stop new corporate tax cuts. 
At the time of publishing, bills are being passed in the Michigan Senate that would further reduce the corporate income tax rate, which is already among the lowest in the nation. The people of Michigan deserve a widespread, forceful rejection of this proposal on the grounds of common sense data, fairness, and a hope for Michigan's future. Tell your legislators to stop cutting corporate taxes.

2. End ineffective corporate tax credits. 
Corporate tax credits are ineffective at stimulating economic growth. In fact, in the MEGA tax program, a staggering 97% of corporations promising jobs in exchange for a tax credit never ultimately meet the number of jobs they promised to create (see pg. 24 of the full report here). Further, by some estimates, in 75% of cases, typical business incentives fail to impact corporate decisions on where to locate or create jobs. Yet, each year Michigan spends over $1 billion on business incentives in the form of tax credits, deductions and exemptions. Ironically, if put towards public investment instead of corporate tax cuts, improvements in school systems, for example, have been shown to have an impact on where businesses choose to locate, attract talent, and create more jobs. We need to stop ineffective corporate tax cuts in their tracks and invest no-longer forgone revenue in critical pieces of communities infrastructure, including our people, education systems, roads, water, and bridges, in order to #FundTheFuture in Michigan. 

3. Reform the Corporate Income Tax. 
By raising the corporate income tax rate from being among the lowest in the country, Michigan can begin to recoup some of the revenue lost over the last decade since the repeal of the Single Business Tax. Reductions in Michigan's Corporate Income Tax rate are not serving communities in the state nor stimulating the economy. Further, various loopholes, credits, deductions, exemptions, and flaws make it worse. Targeted reforms to fix and modernize the business tax code are critical to restoring its tax base, and ending policies that prioritize corporations at the expense of Michigan's future. Check out our full list of reforms to fund Michigan's future.