RIP Michigan Economic Growth Authority Tax Credits
The Michigan Economic Growth Authority’s (MEGA) “flagship” program of offering tax credits to foster job creation ended its long run yesterday. Created in 1995, the MEGA tax credits were designed to attract and retain businesses in the State. Tax restructuring and creation of a new Corporate Income Tax sounded the death knell for the program.
Although the MEGA program of tax credits is gone, the State still offers incentives to facilitate the creation of new jobs. The replacement programs are funded at a much lower level however. Last year, over $500 million dollars was spent in MEGA incentives. The funding for new programs is capped at $100 million dollars.
Incentive programs have been the frequent subject of criticism. Many commentators claim they amount to picking winners while placing others at a competitive disadvantage. They are also subject to exploitation for political purposes. Hopefully, the new programs will address these issues especially in light of the reduction in the amount of available funding.