Read Michigan Tax Incentives—Corporate Welfare? and A Primer on Certificated Cre
ID: 425005 • Letter: R
Question
Read Michigan Tax Incentives—Corporate Welfare? and A Primer on Certificated Credits Under the Michigan Business Tax.
Question:
Is it the role of government to provide incentives to business? Why or why not?
Do you agree with Michigan’s decision to extend tax credits in the manner it has? Why or why not?
Is it ethical for a business to accept government incentives in all cases? Alternatively, is it the fiduciary responsibility of businesses to seek government aid in every instance? Explain and defend your responses.
How might a business that accepts incentives effectively respond to criticism that it is accepting corporate welfare?
Explanation / Answer
Is it the role of government to provide incentives to business? Why or why not?
I don’t think it’s the role of the government to provide incentives but I think it is beneficial to both groups. It benefits the business who is receiving the incentive by allowing those small businesses to become successful and become part of a city or town with more customers and being able to make a profit. For the government it creates more jobs for people who live in that surrounding area or town. With this new company it may get more people coming into town and allow for other businesses to enter into the market.
Do you agree with Michigan’s decision to extend tax credits in the manner it has? Why or why not?
Michigan’s decision to extend its tax credits doesn’t look to be a positive decision for them. Since they have changed the program to MBT they are still losing money and their revenue isn’t increasing with the number MBT’s increasing (Pratt, 2015). They have tried to reform the laws but no changes have been enacted. There should be laws in place to stop the MBT’s from continuing because the revenue in the state can’t keep up with the tax credits.
Is it ethical for a business to accept government incentives in all cases? Alternatively, is it the fiduciary responsibility of businesses to seek government aid in every instance? Explain and defend your responses.
I think it is ethical for a business to accept incentives if they are needed by the business and that it would make the challenges felt by the business easier. If the business needs an incentive or qualifies for one then they should apply for them. It should be made accessible for all businesses.
How might a business that accepts incentives effectively respond to criticism that it is accepting corporate welfare?
The companies response to receiving corporate welfare should be explaining that they have the ability to apply to these incentives and that the government is the one that allows them to receive them. The government would have to change it’s policy for who they give tax credits to and who they wouldn’t allow to receive them.
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