The W.E. Upjohn Institute for Employment Research analyzed Michigan’s MEGA tax credit program with their REMI model and estimated the program’s economic effects. The MEGA tax credit program supplies discretionary tax credits to businesses, with the credit tied to the personal income taxes paid by employees on the new or retained jobs. Researchers simulated the economic and fiscal effects of MEGA by simulating the effects of any jobs created and by simulating the effects of how the program’s credits are financed. The REMI model scenarios yielded percentage shocks to personal income and population for each year, which could then be multiplied by the Institute’s fiscal impact parameters to generate a predicted net fiscal benefit or cost for each year. This report found that the lower-bound assumptions about the MEGA tax credit program identify that it has created jobs over the time period of 1996-2007 at an average cost of less than $4,000 per year of employment created.
