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GRANHOLM TELLS TRUTH WITH NUMBERS, DEVOS DISTORTS

http://www.bellevilleview.com/...

is a recent debate between Granholm and DeVos that hasn't gotten too much coverage yet.  Instead of happening in front of a TV audience, a reporter is asking them the same questions, apparently in each other's presence judging from the context, and transcribing their responses.  There's actually some interesting "back and forth" going on here.  In this segment of the debate, they're talking about the economy in Michigan and citing some statistics I hadn't heard of.  Let's look at the statistical data they pony up and Google out whether or not they can do math:

Granholm says:

Michigan's business tax burden is currently the 13th lowest in the country, according to the Council on State Taxation.

Google tells me that COST, the Council on State Taxation's WWW site is:

http://www.statetax.org

Unfortunately, they don't put their reports online directly -- you need a password or something.  Fortunately, a lot of the people who consume the COST data do put it online, which led me to:

http://www.statetaxes.net/...

(or http://tinyurl.com/... if the above doesn't work -- DailyKos munges the URL, seemingly because it contains whitespace). It turns out that they calculate burden by taking the GDP of the state's businesses (the GSP), and figuring out what % of the GSP the business pays in state+local taxes.  They call this the ETR, the Effective Tax Rate, and a low number is better.  They make some caveats to the effect that individual business will differ, but it sounds reasonable enough for a big-picture discussion.

Looking at the above report, the average countrywide ETR ranges from 3.6% to 9.7%, with the nationwide average being 4.9%.  Michigan's ETR is 4.3%.  I count only a dozen states (counting the District of Columbia as a state) with better/lower ETR percentages than Michigan.  

So, yes, the Granholm camp got this right!

Granholm also says:

In August, the non-partisan Upjohn Institute for Employment Research issued a detailed study, which showed that Michigan's business taxes had very little impact on job creation.

Well, they're potentially not entirely non-partisan, inasmuch as their report:

http://www.upjohninst.org/...
http://www.upjohninst.org/...

was mostly funded by the MEDC and they'd like to do more business with the state of Michigan I'm sure.  But, they insist on total control of the results and no censorship.  I'd strongly suggest reading their Q and A, which goes a long long way to explaining some numbers that have been thrown around by the DeVos camp.  The results of the report are as Granholm has described them.

As an amusing side note on how stupid and misleading our media can be, the headline in the news for this report coming out:

http://www.mlive.com/...

says "SBT must be replaced", when the actual report says quite the contrary.  Read the headline, then read the body of what is said.  Isn't news doctoring fun?

DeVos says:

A nationwide CEO survey ranked Michigan 49th in a survey of best states in which to do business. The facts are clear to me:

Study after study confirms that taxes matter, and that Michigan taxes are too high.

I don't know where this survey is, so I'm going to assume it's the "CEO magazine" study of 300 CEOs and "best states to do business".  

http://www.chiefexecutive.net/...

It looks like Michigan is 47th to me (factoring out that pesky District of Columbia) which is close enough that I'm almost willing to give him the benefit of the doubt.  But, in looking at the reasons for the rankings:

http://www.chiefexecutive.net/...

Taxes were #3 on the CEOs minds, behind "workforce quality"  (that little education thing Granholm keeps pushing) and "workforce pay".  DeVos could be right that part of it is taxes, but taxes weren't the biggest item that the CEOs were ranking on.  Workforce stuff was.  So, mentioning the survey in the same breath as "high tax state" is disingenuous and, of course, disappointing.  DeVos knows full well that the imbalances are largely labor-based.  Hell, it was his wife Betsy that said Michigan workers are paid too much.  

DeVos also notes:

DeVos: Make no mistake, Michigan business taxes are not 13th lowest in the nation. According to a study done by the New York Public Policy Institute, Michigan actually has the fifth highest business tax burden in the countBusry.

(As an aside, let's note that Granholm said "tax burden" and DeVos replied with "taxes are not 13th lowest".  Those aren't the same things.  I won't blame him for misstating Granholm's words...  he does that all the time.)

Initially, I had a hard time finding the New York Public Policy Institute, until I found an MIGOP reference to it:

http://migop.blogs.com/...

It turns out that this is a reference to the Public Policy Institute of New York State, Inc.  Their statistics WWW site "Just The Facts":

http://www.ppinys.org/...

contains all kinds of business metrics, mostly to show how New York state sucks to do business in compared to other states.  I don't know the veracity of their numbers, which are largely derived from other sources, but here's what they say about Michigan, as of 2004:

State and local tax burdens: 24th out of 50 (50 being best)
State business tax climate:  27th out of 50 (50 being worst)
Effective business tax:  34th out of 50 (50 being best -- note this is the same statistic Granholm cites from the COST study above, only for 2004 instead of 2005)
State competitive index: 30th out of 50 (50 being worst)

I'm struggling to find anything on their site talking about how particularly bad Michigan's business tax burden is.  I've found a whole lot of evidence to suggest middle-of-the-road performance, nothing like what he described.  So, at least on this front, DeVos is pulling numbers out of his ass.

DeVos goes on and on:

Today, only 4 percent of Michigan small businesses describe the state's climate as "supportive." If they can go across the border to other states with lower taxes and fewer regulations, why wouldn't they? Michigan is in desperate need of a change.

A quick Google search based off the above led me to:

http://www.nfib.com/... (a twisted summary)
http://www.nfib.com/... (the actual poll results)

Looking at the actual poll results, it shows that 33% of businesses overall find Michigan's business climate supportive -- not 4%!  The survey writer contorts that to 4% by subtracting the 29% who found it unsupportive and coming up with 4%.  Add up all the people who like you, subtract the people who don't like you, and the remainder is how likeable you are?  Apparently, that's how math works in the DeVos world.  It appears that the people who wrote the summary were trying to spin-doctor as much doom and gloom as they could to generate interest.  Clearly, DeVos is pulling more bogus numbers out of his ass on this one.  DeVos and his cronies should lynched (or at least, not voted in) for so egregiously misrepresenting the actual perspective of Michigan's small businessmen. He's just spreading a bad reputation that's undeserved.  

Thank you, Governor Granholm, for making largely-truthful citations when it comes to numbers.  That earns trust in my book.

And a hearty "no thank you", Mr. DeVos, for contributing to the problems of our state by talking us down with lies and crap.

Please pass along to other boards, indepdendents, Republicans, etc.  Everyone's invited to check my work and my analysis.  This is the 21st century.  You can do much truth-checking from your computer at low cost -- it took me a whole lot less time to find the above than the couple hours it took for me to write it up for a mass audience.  Don't rely on reporters to do fact-checking for you.  Apply some critical thinking and do critical investigating when someone pulls out a bag of numbers to influence your thinking.  Make up your own mind on who's credible and who's full of it by researching the facts and citations.  

Originally posted to other72384 on Thu Oct 26, 2006 at 02:46 PM PDT.

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