estimated an effective Michigan tax rate of between 9.2% and 10%, based on state tax law and IRS returns.
At that rate, the plants’ workers could contribute about $4,600 in taxes each year, and over 20 years, the time period the MEDC used in its analysis, they could collectively generate about $294m – well shy of the state’s $1b investment. However, several economists called the analysis “very generous” to GM and the MEDC because it assumes the plants’ employees will provide new tax revenue. In other words, it posits “that these people didn’t have any jobs previously, that they weren’t spending any money”, Gardner said.
With unemployment low, GM is unlikely to hire many unemployed workers, so the jobs will probably generate much less than $294m in new tax revenue over 20 years, economists say. In January, the state alsoelectric rates for some large users, like automakers, which may shift the utility grid’s cost burden on to residential customers.
However, the analysis doesn’t include construction jobs or increases in GM’s state corporate taxes. The company and MEDC didn’t respond to questions about state taxes, but it’s unlikely to push the needle much: GM’s 2021Meanwhile, economists said they strongly doubted MEDC’s claim that the plants’ direct and indirect positions will generate 29,000 new jobs and $29b in new income over the next 20 years.