MIDLAND, Mich. — In her fourth State of the State address, Gov. Gretchen Whitmer proclaimed, “Michiganders should be able to keep more of what they earn.” This is a laudable goal, and why the governor should support broad-based cuts to both the personal and corporate income tax. These reforms would make Michigan more appealing to businesses.
Unfortunately, the governor appeared more interested in handing out subsidies to favored corporations than providing relief to taxpayers. While these corporate deals might make for good headlines, they have been shown to fail at driving economic growth.
“The governor’s speech praised bipartisanship on the recently approved corporate welfare handouts,” said James Hohman, director of fiscal policy at the Mackinac Center. “Rather than subsidizing a handful of companies at taxpayer expense, a higher priority should be improving Michigan’s overall business climate.”
In addition to subsidizing corporations, Gov. Whitmer also proposed offering $2,500 in state subsidies to people who purchase electric vehicles. This is a wasteful tax preference that largely benefits the wealthy and extends special favors to automobile manufacturers, who have been heavily subsidized by Michigan taxpayers.
“A recent report on electric vehicle consumer behavior described the average EV owner as someone with an annual income of over $100,000, and who already owns at least one other vehicle,” said Jason Hayes, director of environmental policy. “Rather than gifting EV owners tax dollars extracted from low-income and working class Michiganders, Gov. Whitmer should ensure that all Michigan residents have more reliable and less expensive electricity.”
The electric vehicle credit was one of six expansions of government called on by Gov. Whitmer in her speech. Only one government limitation was announced. The Mackinac Center has tracked the expansions and limitations mentioned in every State of the State address since 1969. The following expansions proposed in the address include:
Increasing school funding
Increasing the Michigan Earned Income Tax Credit
Capping the cost of insulin at $50 bucks a month
Recruiting more mental health workers
Expanding mental health spending in schools
The one limitation mentioned was exempting pension income from taxes. The governor averaged seven expansions and less than one limitation during her term. Both expansions and limitations have been below her two immediate predecessors, Gov. Rick Snyder and Gov. Jennifer Granholm.
You can view the tally of past expansions and limitations by gubernatorial administrations here.
You can view the complete list of Mackinac Center policy recommendations here.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
Please consider contributing to our work to advance a freer and more prosperous state.