MI. Senate Bill 768: Lower Taxes or More Infrastructure to Improve GDP?

Michigan GOP put out a proposal for a in a Detroit Free Press article 'Michigan House GOP unveils sweeping income tax cut, different from Senate GOP plan' that seeks to do a number of things of which the one's I'm primarily interested in are the reduction of individual income tax rate from 4.25% to 3.9% and the corporate income tax rate from 6% to 3.9%.

You can read the SENATE BILL NO. 768

The question then becomes should we lower the tax rate or should we spend the money on infrastructure? That isn't an easy question to answer because it would take a significant literature search (and perhaps some unique calculations) to find precisely where that tax rate and infrastructure spending should be for maximum GDP ROI.

It does appear that from a Tax Association study on a related topic in ,'Evaluating the Economic Impact of Additional Government Infrastructure Spending' that infrastructure spending grows GDP and cutting corporate and income taxes also increases GDP. 👍👍

This is what I can say without spending a lot of time figuring out where that number should be (I think I could figure out a pretty good split for this money that sort of finds the sweet spot but it takes hours and hours and hours of review, reading, and cross comparison with Michigan's future strategic prospects in mind. Maybe I can't as it all depends on available information, time and a pretty good calculator.). 

So what I have to say probably isn't particularly helpful. The answer is they both increase GDP but finding a workable spending framework through negotiation and evidence based management is helpful. Balancing the science with the politics is taxing at best (😏 Pun!). Whatever Republicans and Democrats decide I think they will find a workable level (Excess funds isn't the worst thing to argue over.). I just have two caveats (MNC-DC, G7-Tax)

1.) Make sure the infrastructure is well thought-out to return Michigan as an advanced manufacturing destination with export oriented systems.

2.) Ensure the tax cuts are sustainable over years of abundance and years of leanness (i.e. don't put the rate so low it isn't sustainable.)

Lock up the untenses and let the food fight begin........