Michigan House grants $2.5 billion in tax relief | national news
(The Center Square) — After reaching a deal with the GOP-dominated Senate, the Michigan House approved a $2.5 billion measure to provide broad tax relief against 40-year-old high inflation.
The compromise includes the House’s proposal $1 billion to raise the personal tax rate from 4.25% to 3.9% and spend $1.5 billion to pay off pension debt, plus the Senate GOP $500 by child tax credit.
The compromise eliminated the Senate GOP provision to lower the corporate tax rate from 6% to 3.9%. Michigan has approximately $6 billion in federal funds.
Rep. Matt Hall, R-Marshall, hailed the plan, which reconciles Senate Bill 768 with House Bill 5838.
“People I speak to in the communities I represent know that the state has all this extra money and is working with record surplus levels,” Hall said in a statement. “It’s time to give some of that money back to taxpayers and hard-working seniors to help them manage their budgets.”
An average family of four in Michigan would receive about $147 in tax relief; with the child tax credit, the savings could climb to $1,147.
Many seniors could also get additional tax relief from proposed changes to the $600 million exemption. Tax-exempt income for those 62 and older would increase to $20,000 for single filers and $40,000 for joint filers, from those 67 and older under the current law.
An additional exemption would apply to retirement income – $20,000 for single filers and $40,000 for joint filers. With the two exemptions, someone 62 or older with retirement income can exempt $40,000 for single filers or $80,000 for joint filers.
Despite a likely veto from Governor Gretchen Whitmer, 10 Democrats voted for the bill.
GOP’s proposed tax relief is more than triple the relief from Whitmer’s plan. Whitmer wants $500 million in annual tax relief for retirees who would save about $1,000 a year and about $262 million a year for low-income families.
However, the larger GOP tax break would shatter Whitmer’s $74 billion proposed budget for 2023.
“Michigans who have worked hard, played by the rules and budgeted all their lives should be able to retire and keep all their hard-earned money,” Whitmer said in January. “Putting money back into the pockets of retirees will help them pay for essentials, from prescriptions, to rent, to utilities, from car payments to gifts for their grandchildren.”
The GOP argues that all Michiganders need tax relief, while Whitmer wants targeted relief for seniors, low-income families and electric vehicle companies.
The conservative Michigan Freedom Fund welcomed the passage of the bill.
“We are proud of the leadership of the State House for making tax cuts a priority to help four million Michigan taxpayers who are struggling with rising prices as a direct result of the Whitmer-Biden agenda,” the statement said. director Tori Sachs in a statement. “The state government has billions in excess revenue, and it’s time to give that money back to hard-working taxpayers. Governor Whitmer needs to put away her overused veto pen and sign this bill.
Michigan Municipal League CEO Dan Gilmartin applauded votes to pay off pension debt.
“We applaud today’s action by the State House in passing HB 5054 and thank the state officials who made this effort possible,” Gilmartin said in a statement. “This bill would bring much-needed relief to many of our communities and greatly improve the ability of all Michigan communities to move forward. We look forward to working with the State Senate to gain approval from this House as well. »