NCPA - National Center for Policy Analysis


October 5, 2007

The expansion of Michigan's sales tax to many service providers will raise the cost of business-to-business transactions and could hurt Michigan's enterprise reputation at a time when it can least afford it, says the Detroit Free Press.


  • Michigan already suffers from a poor image in some quarters: The state ranked No. 45 in a 2006 Forbes magazine list of the best states for business; only Alaska, Maine, Mississippi, West Virginia and Louisiana fared worse.
  • Last year, the Beacon Hill Institute ranked Michigan 34th for economic competitiveness among all states, down eight places since 2001 when the report began.
  • While the researchers gave Michigan good marks for education among workers, exports and restrained government employment, the state's grade suffered from high unemployment, rising crime and slow growth of new businesses.

"Michigan cannot afford this tax increase," said Curtis Dubay, an economist at the Tax Foundation. "People are flocking out of Michigan in record numbers, and this is only going to exacerbate the problem."

Source: Katherine Yung and John Gallagher, "Taxes may hinder attracting businesses," Detroit Free Press, October 3, 2007.


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