Was Snyder tax cut a net loss for Michigan?

Further evidence that Gov. Snyder's huge tax cut for businesses has had no noticeable impact on Michigan’s perceived economic health: CNBC’s annual ranking of the best and worst states for business shows Michigan edging up from 34^th in 2011 to 33^rd in 2012.

Despite a new, simple corporate income tax of 6 percent – representing about a 60 percent reduction in corporate taxes compared to the old system – Michigan is still ranked below average in the category “cost of business.” Let’s remember that most small companies now pay no state business taxes in Michigan.

CNBC, the cable TV business channel, rates each state in 10 categories and then gives all 50 states an overall score.

The Michigan scores shows that part of the price for that big tax cut was a sharp reduction in funding for K-12 schools and public universities, which appears to have been a dumb move. While the low business tax rate did not improve Michigan’s overall image it did cause us to drop from 34^th to 38^th in the education category, behind Arkansas, West Virginia and Kentucky, and just ahead of Alabama and Mississippi.

Michigan’s best rating? That was, by far, our 12^th place spot in the cost of living category. No doubt our state’s dirt-cheap home prices played a major role in that calculation.

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