Mike Cox, Michigan’s current Attorney General, is running for the Governorship in our State’s 2010 elections. Today, the Detroit News printed a letter of his addressing the mass exodus of college graduates out of Michigan, and hinted at legislation he may be looking to pass if voted into office. While Cox laments Michigan graduates leaving the state as a great injustice and proposes tax incentives to retain them, such action would be a detrimental solution to a nonexistent problem.
Cox opens his argument stating:
In a few weeks, about 40,000 students will begin their college careers at a Michigan university. Unfortunately, when these students are ready to graduate, less than half will choose to stay in Michigan if recent trends hold. Families will see one another less, students educated with billions of our tax dollars will use their talents to build other states’ economies, and employers will continue to leave Michigan. Our economy will never turn around if this brain drain continues.
To remedy this problem he says:
…we should give our college graduates a three-year income tax exemption, putting money directly into their pockets. This tax credit would be an investment in Michigan’s talented graduates and our economy. The funds could help pay down college debt, go toward a home and, most of all, serve as an incentive to use their education in Michigan.
The movement of college grads is not a problem, as Kenneth Darga, a state demographer pointed out in a presentation to the Michigan Revenue Estimating Conference last year. Young adults have a lot of mobility and while Michiganders may be moving elsewhere for work, remember the other half of the ledger, those from the other 49 states, and even other countries moving into Michigan to work.
As to the horrible side effects of this ubiquitous phenomenon, lets take them one at a time.
“Families will see one another less…” Lament globalization then Mr. Cox. Besides, remember you are talking about young adults here, so stop saying “Michigan must compete for our children” These “children” have the right to vote for or against you in a few years. We also have the right to chose if being close to family is a reason to stay in Michigan.
“…students educated with billions of our tax dollars will use their talents to build other states’ economies…” Yes, we know the government makes bad decisions with taxpayer money. The government is taking a risk investing so much in college education; another reason to privatize.
“…employers will continue to leave Michigan” This is a bit of circular logic. Graduates go outside of Michigan because employers are outside of Michigan. The company must be there first to attract the employees, not the other way around.
By offering a three year tax break, the state would also be barring qualified graduates from other states from entering Michigan’s workforce as Michigan students would be flooding local businesses. This is not desirable as innovative businesses practices could stagnate if diverse schools of thought were not allowed in from out-of-state universities.
While lower taxes would be wonderful, such an uneven regulation is not advisable, and is merely a haphazard remedy to a perceived problem.
Adam Rule – MCPP Intern