If there is one thing that unites Michiganders, it is our competitive spirit toward our heart-shaped neighbor to the south, Ohio. We have many things to be proud of: more acres of forests and protected wilderness, the most miles of freshwater coastline in the nation, a unique culture and history, and a university that has the most wins of any program in NCAA D1 football history.
But Michigan lags Ohio in one important comparison between the two states: the economy. With only a few dozen months of exceptions during the late 1990s and 2010s, Michigan has had consistently higher unemployment than our neighbor. As of June 2026, the unemployment rate was 5.0% in Michigan and 3.6% in Ohio. Since 2007, Michigan’s per capita personal income has been $796.25 lower than Ohio’s on average.
It was not always this way. In 1963, during the state’s manufacturing boom, Michigan’s GDP per capita was 13% larger than Ohio’s. But by 2023, the Buckeye State’s GDP per capita was 12% higher than ours.
Many factors have contributed to Michigan’s relative economic decline, but there are several indicators that suggest a trend. Michigan is no longer the competitive state for business it once was, while Ohio has adjusted its taxes and regulations to attract business and growth.
First, Ohio’s income tax burden is lower. Michigan charges a 4.25% income tax on all income, while Ohio charges only 2.75%. Ohio has frequently changed its income tax policy every few years since creating it in 1972, reaching a high of 7.5% on income over $200,000 in 1992. Since 1996, the state income tax has trended downward as both temporary cuts and long-term reforms were enacted. Today, all Ohioans pay a low flat rate. Ohio has been cutting its income taxes while Michigan has not.
Ohio politicians are currently in talks to eliminate the income tax entirely by the 2030s. While Republican candidates for Michigan governor have floated this idea, it does not have the same political support in the Mitten State, with House Speaker Matt Hall, R-Richland Township, calling the proposal unrealistic.
When it does collect tax dollars, Ohio has spent significantly less of that revenue on corporate welfare. From 2000 to 2025, Michigan gave out nine separate mega-deal business subsidies worth more than $1 billion, and at least 62 deals worth more than $100 million. During the same period, Ohio gave only one-mega deal subsidy over $1 billion, and only 14 over $100 million. While taxpayer subsidies are not the only aspect of economic development programs in either state, Michigan’s subsidies cost the taxpayer more.
Ohio’s licensing regulatory burden is also lighter than Michigan’s. The Institute for Justice ranks all 50 states by number and average burden of licensing requirements. Michigan ranked 20th-best in the nation with 47% of lower-income occupations requiring licenses, 308 average days lost, and $281 in average fees. Meanwhile, Ohio ranked 11th-best with 39% of jobs requiring licenses, 269 average days lost, and only $145 in average fees. As the Mackinac Center has written, unreasonable regulatory burdens hurt workers by making it more difficult for them to start earning a living, and they hurt consumers by limiting their options.
Finally, Ohio has been aggressive in recent years at tackling overregulation, while Michigan has largely allowed bureaucratic rules to pile up. In 2023, Gov. Mike DeWine signed a package of laws to cut nearly one-third of the state’s regulatory code. Americans for Prosperity estimates that these reforms will save Ohio taxpayers approximately $44 million and save the state government 58,000 hours of labor over the next decade. Gov. Gretchen Whitmer has not moved to enact a similar law, and overregulation continues to hold the Michigan economy back. continues to hold the Michigan economy back.
Michiganders should see Ohio’s strong economic growth in recent years as a challenge. It would be wise to take our competitive spirit and apply it to productive policies that will allow our economy to flourish. With fewer restrictive rules smothering the free market, Michigan can be as prosperous as it is beautiful. We can help people find opportunities in the state instead of moving elsewhere. And we can give Ohioans one more reason to be jealous. Is that too much to ask?
