Michigan Senate Oks Bill Will Cut Personal And Corporate Tax Rates To 3.9% | Michigan

0

(The Center Square) – The Michigan Senate has approved a bill to lower the personal and corporate tax rate to 3.9%.

Michigan currently taxes corporations at 6% and Michiganders at a fixed income tax of 4.25%.

A map from the Tax Foundation compared tax rates nationwide.






A map from the Tax Foundation shows state income tax rates in 2022.




Senate Bill 768 aims to help Michiganders and businesses recover from COVID and attract migration flows as Michigan’s mortality surpassed its birth rate in 2020 – a warning sign for a state’s economic health as taxpayers fund public services.

Sen. Aric Nesbitt, R-Lawton, says the four-block radius of Michigan’s Capitol is ‘out of touch’ as ​​it celebrates a $7 billion surplus as the rest of the state battles the inflation.

“State government can be full of money. But it’s not our money,” Nesbitt said on the floor. “It’s not the governor’s money. It’s the people’s money. And right now, they need to send less of it to Lansing so they can have more to fill their cars, heat their homes, and feed their families.

The bill would create a non-refundable tax credit of $500 for each child under 19 and increase the retirement income tax exemption to $30,000 for individuals and $60,000 for couples.

If enacted into law, a Senate tax agency report estimates that the bill would reduce General Fund revenue by $1.75 billion to $1.79 billion in fiscal year 2021-22, from $2.33 billion to $2.38 billion in the fiscal years 2022-23 and $2.40 billion to $2.45 billion in fiscal years 2023-24.

Enactment of the bill would reduce School Aid Fund revenue by $23.4 million in fiscal year 2021-22; between $147.0 million and $156.0 million in fiscal years 2022-23; and between $150.3 million and $160.9 million in fiscal years 2023-24.

The loss of income would continue to grow with the economy and the growing families of Michiganders. Both tax changes would be retroactive.

Sen. Curtis Hertel, D-East Lansing, voted “no.” He said the bill favored businesses over Michiganders.

“This bill is nothing but a show; an attempt to reimburse major corporate donors and does nothing for the people of Michigan,” Hertel said in a floor speech.

Michael LaFaive, senior director of tax policy for the free-market Mackinac Center for Public Policy, applauded the bill’s passage.

“Senate Bill 768 finally overturns the 2007 [Gov. Jennifer] Granholm’s personal income tax hike that was set to expire, but that promise has yet to be fulfilled,” LaFaive said in a statement. “Our research showed that returning the personal income tax rate to 3.9% would create 15,000 new jobs for Michiganders in its first year alone. We thank the senators who endorsed this broad-based tax relief for Michigan families and businesses.”

The Michigan Freedom Fund hailed the bill’s passage, citing 40-year-old high inflation as the reason for returning the excess tax.

“We applaud the Republican members of the Senate who voted to cut state income taxes and return $1 billion to the people of Michigan,” Executive Director Tori Sachs said in a statement. “The state has a $20 billion budget surplus and recently handed out $1 billion to just one company. Instead of spending taxpayers’ money on other projects for Whitmer’s special interests, the Senate has voted to give it back to the people. The State House should do the same and vote quickly to give that money back to the taxpayers who are battling record inflation in the Whitmer-Biden economy.

The bill is returned to the House.

Share.

Comments are closed.