MIDLAND – The Mackinac Center for Public Policy today announced that it has acquired a model it will use to estimate the impact of tax changes on Michigan’s economy. The model, known as the State Tax Analysis Modeling Program, or STAMP, was designed by the Beacon Hill Institute for Public Policy Research in Boston, Mass. The program can estimate the economic impact of tax increases or decreases on the Michigan economy through the year 2004, and separate the data into categories by income groups, industry sectors, and government revenue.

“Now the Mackinac Center can inform Michigan legislators about the net effect of the tax policies they propose, before they are voted upon,” said Michael LaFaive, director of fiscal policy for the Center. “If a legislator wanted to delay next year’s scheduled income tax cut of one-tenth of 1 percent, for instance, the model could estimate how many jobs would be lost as a result, and which Michigan industries and income groups would be hit the hardest,” he said.

Economic models can play an important role in helping leaders make decisions about policy alternatives. Because there is an increasing appreciation for the impact that taxes have on economic growth in states, models such as STAMP have been growing in popularity. Policy organizations in states such as California, Ohio and Virginia have all used versions of the STAMP model, as has the state government of Oklahoma.

“This is a service the Mackinac Center has wanted to provide for the state of Michigan for some time,” said LaFaive. “The STAMP model is one more way the Center can help interested lawmakers and voters to better understand the impact of economic policy.”