Thursday, September 3, 2009

Opportunity is knocking

Michigan is finally on the brink of breaking free from the tired,regressive policies of the Granholm era.Suffice it to say if the Republicans can't step up and take back the state this go-round,well,I really don't want to think about that.Instead,we just need to get behind the Conservative that will lay out a plan with boldness and conviction.Who is this person?I've got to be honest,the jury is still out.

So,how about a few suggestions for the contenders.First,more of the same is obviously where we don't want to go.I would skip the band-aid approach thinking that we simply need to tweak things to turn it around.It's time to clean house and work with a clean slate.The people have spoken and want change,just not the Obama version.

Without question,the economy tops the list.The best place to start?Scrap the MEDC and MEGA.They are batting less than 30% on delivering the jobs that are announced.Nobody likes a taxcut more than me,but the results have to be there to realize the benefit of reducing the tax rate.The biggest reason I see is that the target industries are wrong.The film industry?High profile but low results.The goal is to generate growth and expansion locally,not sending the profits back to Hollywood.Employment numbers are minimal for shooting a film and there is no residual value.Once production wraps,the sets and crew are gone.We need to incentivize industry growth that creates a sustainable employment base after the investment is made.

I've always been a proponent of making our business tax rate too expensive for businesses to pass up.It must be clearly more expensive for them to take their business to other states or countries than it is to bring it here.Just like the commercial for the scrap metal guy on the radio where he says,"if you don't bring your scrap metals to me,we both lose money".The difference here is a permanent low tax rate as opposed to an incentive based program which businesses realize is only temporary.Study your history of economics and the results are clear.Low tax rates lead to increased tax revenue.This is the result of success as businesses have the required capital to expand and invest due to the low tax burden.The winners extend up the entire chain from the workers to the employers to the good old tax collector.

Regulation is another key expense.We must have regulation to protect the consumer.Shady characters abound and would thrive without regulation.But,excessive regulation is a huge expense.Things like duplicate regulations at different levels of government.Look at the hoops the car dealers are having to jump thru just to submit a clunker deal.And they are still waiting for their money which is death for a high cash flow business.We hear the call to drill for oil off our shores.The red tape would turn this into a multi-year debacle to get any significant volume of oil flowing.

Entitlement programs are a massive strain on the state's budget.With our highest in the nation unemployment rate,we are particularly hard-hit.The call is to extend jobless benefits even further.Providing Medicare and SS to the sick and elderly is more or less an act of compassion from the taxpayer and certainly isn't going away regardless.I have to wonder about unemployment.Thinking outside the box may not be popular here,but with benefits now exceeding a year,would it be unreasonable to expect something in return for these benefits?These aren't the sick or the too old to work and we know that nobody is putting in 40 hours on a job search because we don't have any jobs to search for,remember?Why can't these people on the receiving end perform some level of community service in exchange for the benefits?Certainly,there must be things that are worthy that the funding isn't there for.It may make those that normally would decide to stay on the rolls until their benefits are exhausted to be a little more pro-active in their job hunting.

Just a few thoughts on moving significantly away from the course we are now on.More to come...

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