LANSING – It turns out that Michigan isn’t doing as badly as some might expect in terms of the burden it places on businesses during a vacillating economy, but it isn’t doing all that well either according to a new Anderson Group study released Monday.

Compared to other Midwest states, Michigan found its best ranking in the category of state and local taxes paid as a percentage of personal income, coming in 31st and bettering Pennsylvania (32nd), Ohio (42nd) and Wisconsin (45th), however, Indiana (18th) and Illinois (28th) ranked higher.

The study, commissioned by House Speaker Craig DeRoche (R-Novi), puts Michigan’s best ranking at 27 out of 50 states in total taxes paid by businesses as a percentage of profit earned within each state. Michigan’s percentage based on 2004 U.S. Census data that was the latest available, was 28.4 percent compared to a U.S. percentage of 27.7 percent.

Michigan is ranked lowest at 33rd in a comparison of total taxes paid by businesses as a percentage of private gross state product, with the state reporting a percentage of 3.7 compared to a U.S. rate of 3.5 percent.

In the other two categories analyzed for the study, Michigan ranked 29th in terms of total taxes paid by businesses as a percentage of statewide personal income (3.8 percent compared to the U.S. rate of 3.7 percent), while coming in at 31st in terms of total state and local taxes as a percentage of statewide personal income (10.3 percent for Michigan and 10.4 percent for the United States).

Since Michigan is the only state with a single business tax, the comparisons were based on data for taxes on property, sales and excise, license, individual income, corporate income and unemployment contributions. To be included in the upper echelon of this analysis, states had to be one of the top 20 in terms of total state and local taxes paid as a share of personal income, as well as be one of the top 20 states with the lowest proportions on all three of the business tax measures mentioned before.

The states of Alaska, Hawaii and Wyoming were removed from consideration due to their unique geographical or economic situations.

With that, the top ten states were Alabama, Arkansas, Colorado, Georgia, Missouri, North Carolina, Oklahoma, South Dakota, Tennessee and Virginia.

Benchmarking from that list against the state with the highest business taxes as a share of personal income, North Carolina, and the state with the highest business taxes as a share of private gross state product and state profits, Virginia, the $12.3 billion Michigan collected in taxes is still nearly $2 billion too high to break the top ten.

According to the study, Michigan residents direct .5 percent more of their personal income to business taxes than those residents in low-tax states.

In the other three categories, Michigan bested only Illinois in all three, while only ranking better than Wisconsin in terms of total taxes paid by businesses as a percentage of statewide personal income.

In comparison to other auto-manufacturing states, Michigan lost the most jobs at 47,947 between 1998-2004. Of those states, Michigan had a lesser tax burden in all three categories compared to South Carolina, which saw a gain of 5,635 manufacturing jobs during that same time, as well as Illinois, which saw a loss of 3,724 auto jobs.

Except for the category of business taxes paid as a percentage of personal income, Michigan faired better according to the study in terms of burden than did Mississippi, which lost 2,544 manufacturing jobs during the same reporting period.

Tennessee had the best rankings among the auto-manufacturing states in all three categories, placing in the top five in all. During that same time, the state saw an increase of 5,207 manufacturing jobs.

In terms of states that rely on high-tech sectors of businesses, Michigan only faired better than Kansas in every category. The state beat out California and Connecticut in terms of state and local taxes as a percentage of personal income. Michigan also beat out Connecticut in business taxes paid as a percentage of personal income and California and Washington in terms of business taxes paid as a percentage of profit earned within each state.

Other high-tech states that did better than Michigan in terms of tax burden were Colorado, Indiana, Maryland, Massachusetts and Virginia.

With the Legislature readying a vote Wednesday to eliminate the SBT, the analysis did conclude that based on 1999-2000 numbers, more than a quarter of the SBT filers pay no SBT and 45 percent of filers pay less than $5,000. The study states that less than 200 firms made up 27 percent of the overall SBT revenue paid to the state.

Of the $12.3 billion in taxes paid by businesses in 2004, $1.8 billion came from the SBT. The other main form of business taxation is in personal property, amounting to $6.9 billion of the total amount paid during that year.

Other taxes: motor fuel ($187.3 million), public utilities sales ($85.9 million), other selective sales ($425.2 million), licenses ($402.9 million), unemployment compensation ($1.7 billion) and individual income ($643.8 million).

The study will help guide policymakers as they embark in rewriting Michigan’s business tax code and bring the state into the top 10, DeRoche said.

“Michigan has been there before,” he said. “We’re focusing on what our state government can do to affect our economy.”

When asked why the study did not include the tax burden for different sectors of business, since each industry pays into the system differently, DeRoche said Michigan did not construct it’s tax structure to prepare for the Henry Fords of the world, much like Seattle didn’t set up its taxes for someone to sell software to IBM, referring to Bill Gates. The state’s tax structure should be a structure that people can respect and want to pay into and one that has a fair numerical amount, he said.

Anderson added that the study does include explanation that “taxes aren’t the only reason” for Michigan’s slowing economy.

Whatever restructuring or cuts are made, Anderson said the study does not lay the groundwork for how long a boost in the economy will take, but that other states that have taken similar steps in restructuring do see a gain in jobs.

Repeating his call that a new tax structure will be less of a burden to Michigan businesses, DeRoche said that revenue neutrality will not occur but that by reforming the tax code the state will see more revenues as the economy improves.

“It will not hurt services,” he said, commenting on what some critics have said would be an attack on state services should revenues be cut.

Of the future of the Michigan Economic Development Corporation in terms of operating under a revised tax code, DeRoche said “Ideally you shouldn’t have to come to Lansing (to get a tax break).”

He said announcements such as Google’s show the state is suffering when a company like that, which is not paying a bulk of retiree benefits for years to come and has less obstacles to market identification, still needs half of its taxes cut to bring jobs.

But as DeRoche said that the study was one in a series of three (the other covering the areas of education and infrastructure) to guide policymakers, Treasurer Robert Kleine found faults in the study’s measurements.

Kleine said the study should have included the state’s history of rankings that would show Michigan has improved upon its once high tax burden rankings.

He also said that eight of the top 10 states have lower per capita incomes than Michigan does and that that shouldn’t be a goal of policymakers in the state. Kleine also criticized the study for not looking at where the cuts would come from and what would happen to public services, because the state has to spend money on educating the workforce in order to compete for jo