LANSING, Mich. — Sen. Joseph Bellino on Tuesday said a Democrat scheme to stop an automatic state income tax rate cut from going into effect has failed.
“This is a victory for all Michigan families, who will soon see long-term income tax relief because Senate Republicans stood strong against a Democrat shell game,” said Bellino, R-Monroe. “If the Democrats’ plan had gone into effect right away, it would have stopped a tax cut for everyone in exchange for a one-time rebate too small to cover a month of gasoline for an average family.”
Under a 2015 law, if revenues in Michigan’s general fund increase past a certain point, an automatic and permanent reduction to the state income tax rate is triggered. The House and Senate fiscal agencies estimate that Michigan was $700 million over the trigger’s threshold in fiscal year 2022, which would reduce the income tax rate from 4.25% to 4.05%.
If enacted by April 18, House Bill 4001 would have stopped that cut by retroactively moving $800 million from the general fund to a new fund to provide one-time $180 rebates in 2023.
The bill also increases the state’s Earned Income Tax Credit (EITC) from 6% to 30% of the federal EITC and phase-in over four years an exemption on certain retirement income from the state income tax, such as public retirement or pension benefits.
“I still support increasing the EITC and ending the retirement tax, and I am disappointed the Democrats played politics with these issues by combining them with a scheme to rob much-needed relief from everyone in our state — and doing so with no public hearings or input,” Bellino said. “I hope Senate Democrats will begin to work with us on a bipartisan effort to provide immediate relief to all our seniors and workers.”
###