Puffery And Spin The Norm When Industry Advocates Are Protecting Tax Favors

Michigan forestland owners want to keep state and federal tax breaks

Dansville resident Tim McCarthy is a small forest owner who wrote a column about his industry in the Aug. 27 Lansing State Journal.

McCarthy argues for special tax privileges in the column.

“But caring for our forests takes hard work, and is a risky, long-term investment,” he wrote. “Without the right tax policy in place, the benefits our forests produce for Michiganders will suffer.”

McCarthy also wrote: “Michigan counts on forests for clean air, clean water, $14.6 billion in economic revenue, and 154,000 jobs.” McCarthy didn’t say where he got those numbers.

ForTheRecord says: According to the U.S. Bureau of Economic Analysis, forestry, fishing and related activities accounted for $585 million of production in Michigan in 2015. There were 1,833 jobs in forestry and logging in the state in 2016, according to the U.S. Bureau of Labor Statistics.

The official figures that are systematically collected by federal agencies show that McCarthy’s industry represented a small fraction of Michigan’s $487 billion total output in 2016. Advocates seeking tax breaks in Lansing or Washington often give inflated numbers about their industry’s economic impact.

The forest owner in the Lansing State Journal was lobbying to preserve federal income tax breaks benefiting his industry. Exceptions for his industry and many others could be eliminated this fall if Congress passes a tax reform bill that lowers personal and corporate income tax rates by eliminating narrow special interest deductions and exemptions.

In 2013, Michigan legislators passed several bills that made it easier for small forestland owners to get property tax breaks, contingent on adopting management practices that meet state guidelines. To get tax breaks under the previous law, these owners had to meet the same conditions as giant forest product companies that own thousands of acres.