Column: How tax reform spurs prosperity
Last September, Vice President Mike Pence promised the “largest tax cut in American history” to an audience at American Axle & Manufacturing in Auburn Hills. Three months later, the Trump administration delivered, passing the Tax Cuts and Jobs Act.
As Pence highlighted in downtown Detroit last Friday, the 2017 tax bill — groundbreaking legislation that represents the fulfillment of one of President Donald Trump’s major election promises — is already having a huge impact across industries. Now that the corporate tax rate has been cut from 35 percent to 21 percent, major companies are reinvesting in cities and towns across America, including here in Michigan.
Directly crediting tax reform, FCA announced plans to invest more than $1 billion to modernize a truck assembly plant in Warren, bringing production of certain trucks back to the U.S. from Mexico by 2020. FCA will create more than 2,500 new jobs and give bonuses to 60,000 employees. Across the state in Grand Rapids, Mill Steel Co. announced tax cut bonuses to all full-time employees. Lakestone Bank & Trust awarded employees raises and bonuses. And DTE Energy promised savings of nearly $190 million to customers as a direct result of the lower corporate tax rate.
Major tech companies have also started to see the benefits. For example, Apple — which employs nearly 1,000 people across Michigan — announced it would invest $350 billion in our economy during the next five years. Of this, $5 billion will go to manufacturing in the U.S., creating an estimated 20,000 new jobs across the country.
But Apple is doing far more than investing in the current workers of America. Thanks in part to the tax bill, the company plans to develop its various education projects, equipping educators to teach coding and other computer science skills to prepare students to join the workforce and fill the skills gap. It’s a remarkable investment — one that Apple CEO Tim Cook pointed out reflects the company’s deep indebtedness to our national culture of ingenuity, creativity and innovation.
Our American character — our boldness, entrepreneurialism and curiosity — was and is a reason for our success in innovation and technology. What we needed was a tax code that encourages that character to flourish, allowing innovators in companies large and small to take risks and dream big. The new tax law will help us hold onto our global lead in innovation and be confident in our readiness for the coming century.
And since then, our leaders have more than delivered. The Tax Cuts and Jobs Act doesn’t benefit only major companies on the coasts — it also benefits small business owners, workers and individual taxpayers throughout Michigan and across the country. On a state level, Michigan’s existing business-friendly tax policies complement the federal tax law. According to the Consumer Technology Association’s Innovation Scorecard — a ranking of each state’s innovation-friendly policies — Michigan’s 6 percent corporate tax rate makes it an attractive launch pad for new businesses. This is one of the reasons the state is a 2017 “Innovation Champion.”
Our federal leadership has done its part, clearing the path for U.S. entrepreneurs and innovators to expand their businesses, bring on new talent and develop new products and services. Now it’s time for Michigan innovators to do theirs, fusing this remarkable economic moment with the unique gifts of the American spirit to hire more American workers and invent new technologies that will make our lives better in the future.
Gary Shapiro is president and CEO of the Consumer Technology Association.