Michigan is falling behind other states, and experts at Americans for Tax Reform point to Gov. Gretchen Whitmer’s policies as the primary reason why.
In a commentary, the nonprofit taxpayer advocacy group noted that Michigan ranks 10th among states for population, while its economy ranks among the worst states, outpaced by states like Rhode Island when measured on real per capita gross domestic product.
“Despite Governor Whitmer’s bizarre attempts at burying her head in the sand – like claiming the state has the number 1 economy – she can’t hide the facts,” according to ATR.
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The Great Lakes State is 40th in job growth, 39th in median income, 41st in unemployment, all of which is contributing to Michiganders fleeing to other states with better opportunities.
“Sure enough, around half of the 169,000 people who fled the state in 2022 did so because they found a job elsewhere,” ATR reports. “Which states did they go to? Sure, the usuals – Florida, Texas, and Arizona – got their fair share of Michiganders, but a nearly equal number moved to Indiana, Ohio, and Illinois.
“If people are fleeing your state for Illinois, there’s a problem.”
ATR points to taxes, noting large numbers of Michiganders have relocated to states with the lowest taxes in the country, including Tennessee, Georgia, and North Carolina.
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Both Indiana and Ohio also have income tax rates that are roughly 1% lower than Michigan’s, while Indiana’s corporate tax rate is 2% lower and Ohio’s is zero.
“The fact that Democrats insist corporate taxes have no impact on middle and lower classes while companies flee their states en masse demonstrates a baffling lack of foresight,” the commentary read. “Cutting taxes would provide the economic growth that Michigan is starving for, and there’s some evidence that those benefits would hold true even if the state is running a deficit.”
The bottom line: if folks are moving to lower tax states, they’re not moving to Michigan.
“You don’t have to have the worst tax rate, you just have to be worse than the competition,” according to ATR.
Other factors in Michigan’s economic struggles stem from the state’s ranking of 38th in the nation for labor market regulations.
“Every single one of the states growing while Michigan declines has lower employment costs,” ATR reports.
The situation drives the state’s most educated elsewhere, and companies follow.
“It’s a vicious cycle, and the Whitmer administration is doing nothing to stop it,” according to the commentary.
“Rather than address the lack of opportunity, the governor would rather make the state even less attractive for businesses and individuals alike by repealing right-to-work, reinstating prevailing-wage laws, and raising taxes,” ATR reports.
“Policy isn’t the end-all be-all when it comes to the economy, but it can certainly help, and as long as people like Whitmer are in office, Michigan’s job growth won’t break 0.9%,” the commentary read. “In fact, it will likely decline.”
The ATR analysis does not include other Whitmer-approved policies that are also weighing heavily on Michiganders.
A net-zero carbon energy policy signed into law by the Democratic governor in 2023 is expected to raise energy costs for each household by as much as $2,750 per year, while insurance reforms she touted have resulted in the highest car insurance rates in the nation.
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There’s also Whitmer’s unfulfilled campaign promise to “fix the damn roads,” which the national transportation research nonprofit TRIP estimates is costing Michigan motorists $17 billion a year.
All of the above has contributed to 41% of Michiganders living paycheck to paycheck. That’s up from 38% in 2019, translating into about 200,000 more state residents who can’t afford a survival budget than when Whitmer took office.