Under new legislation passed by the Senate, Senate Bills 1153-1155, your employer will be able to keep your income taxes.
If a company has 500 or more workers they would be eligible to receive the income tax abatement. Now on the surface this seems like a good idea, more businesses will be willing to stay or move to Michigan in theory because of this bill, but this bill is nothing more than corporate welfare.
First off, we must remember that the majority of Michigan businesses wouldn’t be eligible for this bill because most Michigan ran businesses have few employees, and nowhere near 500 employees.
Even worse, the Michigan Strategic Fund will be allowed to choose which employers will be allowed to keep the income taxes, which has an abatement limit of $250 million dollars. For those that are unfamiliar, the Michigan Strategic Fund is a government created agency to administer corporate welfare programs.
Now, of course, the government has to always get their share. To allow for this blatant form of corporate welfare to occur, the Michigan Strategic Fund will receive a 5% administrative fee from companies for their generosity.
In a way, this is one of the most honest pieces of legislation, the government is removing itself as the middle-man.
Once fully implemented, the Office of Corporate Welfare, also known as the Michigan Economic Development Corporation, which is in charge of the Michigan Strategic Fund, will be raking in the money.