Cash-strapped states look to roll back tax credits
Michigan last week eliminated several tax credits, including those for small donations to universities, food banks, museums and public television. The state also capped at $ 25 million per year, tax incentives it gives to the film industry, which has been lured to the state since 2008 by some of the most generous incentives in the nation. The changes were part of a tax overhaul Republican Governor Rick Snyder says will stimulate job growth.
The Legislature of Oklahoma has established a special committee to examine the tax incentives there.A report by the Tax Commission in Oklahoma in October 2010 listed the prices of hundreds of credits and incentives.
"It's like a big Christmas tree," said Larkin Warner, Professor Emeritus of Economics at Oklahoma State University, who sits on the committee. "Legislators should seriously consider."
Economists generally favor a more uniform tax, but recognize that incentives can promote policy objectives such as capital investment, use of clean energy and job creation, said Dana Johnson, recently retired economist Comerica Bank Chief.
"Taxes can be used, as well as direct grants, (promoting) behaviors," says Johnson. "The question you always have to ask is: Is it the turnover?"
Three focus groups in Ohio called for a review of tax credits to help solve the $ 8 billion state budget deficit.
"It is now back in Ohio," said Levea Brachman, executive director of Greater Ohio Policy Center, a progressive think tank that has joined with the libertarian trend Buckeye Institute and the Center for Community Solutions centrists by calling a review of state tax policies. Grand Ohio believes that this government tax breaks cost the state $ 300 million per year.
One of the breaks that Michigan has eliminated the taxpayers get a refund of 50% of certain charitable donations when they filed their tax returns from the state. About 550,000 people in its opinion, in recent years.Without it, Michigan will save $ 47 million per year, according to estimates from the state budget.