MEGA would discriminate against small businesses, retail businesses, and capital-intensive businesses. MEGA would result in these employers paying a greater percentage of total single business tax revenue, and cause inefficient use of economic resources.

As mentioned previously, MEGA credits are available only to selected Michigan firms that employ at least 75 new employees, and to out-of-state firms that employ at least 150 new workers. MEGA is clearly aimed at large firms, since only the largest employers can consider projects that create at least 75 new jobs. But big businesses are not generating Michigan's new jobs. Small firms have been and will likely continue to be the engine of new employment in this state. Subsidizing employment in big businesses discriminates against small firms, and forces small business to bear more of the tax burden.

Not even all big businesses can benefit from MEGA. If Grand Rapids-based Meijer Corporation opens a new store and hires 150 new employees, it will not receive MEGA tax treatment because of its retail status. Even if Meijer is contemplating a choice of opening a new store in Clio, Michigan or Mishawaka, Indiana, MEGA benefits cannot influence its decision. MEGA establishes a policy that retail jobs are not as valuable as manufacturing jobs, an economic decision that is best left to sovereign consumers operating in a market economy, not state bureaucrats.

Capital-intensive manufacturers, who use a high proportion of capital in relation to labor, may also create too few jobs to benefit from MEGA tax credits. For example, Dow Chemical may invest $50 million in a new production process, but create only ten jobs due to its capital-intensive, highly automated production technology. Furniture maker Herman Miller, on the other hand, may invest the same $50 million, employ 150 workers, and qualify for MEGA tax credits because of its labor-intensive manufacturing process. Dow has invested the same amount in the state, but would not be granted SBT tax relief under MEGA. Subsidizing labor and taxing capital artificially changes the relative prices of capital and labor, encouraging firms to use combinations of capital and labor that are not efficient, which wastes society's scarce resources. Selective incentives distort price signals, encourage economic inefficiency, and politicize commercial exchange.