Cutting Taxes Works

According to our favorite Governor’s press release, she has helped save or create 2,755 jobs in the state of Michigan. How did she do it? By giving ‘tax credits’ to make our state more attractive. Here is an example:

Magna Electronics – The manufacturer of electronic products for the auto industry plans to invest $20 million to expand operations in Rochester Hills to include products for electric and hybrid vehicles.  The project is expected to create 201 new jobs, including 90 directly by the company.  The MEDC estimates that increased economic activity created by the project will create an additional 111 indirect jobs.  Based on the MEDC’s recommendation, the MEGA board today approved a state tax credit valued at $3.4 million to help convince the company to expand in Michigan over a competing site in another state.  The city of Rochester Hills is considering an eight-year abatement valued at $139,271 to support the project.

Here is another:

Mercedes-Benz Hybrid LLC – The subsidiary of Daimler AG will develop and maintain a line of conventional and alternative propulsion systems in a new, permanent research and development facility in Washtenaw County.  The project will generate a $9.9 million investment and create 454 total jobs, including 223 directly by the company.  The MEDC estimates that increased economic activity created by the project will create an additional 231 indirect jobs.  Based on the MEDC’s recommendation, the MEGA board today approved a state tax credit valued at approximately $7.5 million over 10 years to help convince the company to expand in Michigan over a competing southern state.  The Ann Arbor region will consider a tax abatement to also support the project.

What have we learned by these examples. Cut taxes and economic activities increase. I wonder if the officials at Mercedes and Magna bothered to read Jenny’s State of the State address and her plan for extremely expensive electricity in the coming years?

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