Dr. Gary L. Wolfram

The governor’s five-year plan does not include reducing the cost of producing goods and services in Michigan — something that would attract industries trying to compete globally. Instead, the plan is built around the 21st Century Jobs Fund and other state programs that substitute central planning for the market process.

Only eliminating the SBT and ensuring a bold net reduction in business taxes can begin to trump Michigan’s other handicaps in its economic competition with other states and nations. Even eliminating the SBT and cutting state spending dollar-for-dollar is not impossible; the Mackinac Center for Public Policy has detailed billions in potential state budget savings in areas like Medicaid, education and corrections.

Even after Gov. John Engler’s efforts to cut taxes, Michigan remains one of the most highly taxed states in the union, resulting in lost jobs and forgone economic opportunities. To get a handle on high taxes and runaway state spending, Michigan needs to follow the lead of 14 other states and adopt a constitutional amendment or law requiring a legislative supermajority before any tax can be raised.

Research shows that Michigan's Prevailing Wage Act of 1965 is a costly piece of special-interest legislation that forces public schools to waste millions of dollars each year on inflated construction costs. Repealing the act-or at least exempting schools from its rules-would make school construction more affordable, save money for use in the classroom, and allow for other improvements to public education.

Michigan's sales tax, first enacted in 1933 during the Great Depression, now contains some rather interesting, if not hard-to-explain, features.