During times like these, we need to be doing all we can to encourage investment. But Michigan's Personal Property Tax (PPT) does the opposite. By taxing investment in machinery, equipment and technology that could help create jobs and grow businesses, it discourages those investments in Michigan.
The biggest issue to eliminating the PPT is that it is a significant revenue source for some communities. But we believe there are ways to minimize adverse impacts by phasing out the tax, allowing communities to raise replacement revenues or having the state fund the difference.
Some also argue that further tax reform isn't necessary to make Michigan competitive after the state business tax was reformed earlier this year. But those changes are projected to improve Michigan's overall business tax climate to about 22nd among the 50 states. If we want to be a "top ten" state for job and economic growth, having an "average" business tax climate isn't likely to help us achieve that goal.
The PPT is a tax on investment, and Michigan should be doing everything it can to encourage investment during these challenging times, not discourage it.