Michigan House approves Republicans' tax cut, pulling votes from seven Democrats
Members of the Michigan House of Representatives on Tuesday approved a 0.2% reduction to the state income tax rate, as Republicans continue to blame Democrats for increased rates in 2024.
In 2023, Michigan Treasurer Rachel Eubanks announced the state's income tax rate would fall from 4.25% to 4.05% due to a 2015 law signed by GOP former Gov. Rick Snyder which reduces the income tax rate when revenues outpace inflation, though Michigan Attorney General Dana Nessel determined the reduction would only apply for the 2023 tax year, drawing the ire of Republicans.
While the Michigan Court of Appeals rejected arguments from Republicans and the free-market Mackinac Center for Public Policy that the cut should have been permanent, Snyder told the Advance in October that was the policy's original intent.
'They said it wasn't permanent, and believe me, it was intended to be permanent. I was there. I did the spreadsheet that made the calculation to do it,' Snyder said.
The House voted 65-43 to reduce the income tax rate, with full support from House Republicans. The bill also received support from seven Democrats; Reps. Kelly Breen (D-Novi), John Fitzgerald (D-Wyoming), Matt Koleszar (D-Plymouth), Denise Mentzer (D-Mt. Clemens), Reggie Miller (D-Van Buren Twp.), Angela Witwer (D-Delta Twp.) and Mai Xiong (D-Warren).
State Rep. Kathy Schmaltz (R-Jackson) who sponsored the bill said it would allow Michiganders to hold onto more than $700 million in income each year.
'Families across Michigan are struggling to afford basic necessities — groceries, gas, housing, and child care costs are stretching budgets thinner than ever,' Schmaltz said in a statement. 'People need relief, and they need it now. With the state collecting more than enough tax revenue, it's time to give money back to the hardworking families who earned it.'
However some Democrats argued the cut would have a minimal effect on the Michiganders who need it the most
'This bill is a wolf in sheep's clothing, the wolf being the wealthy receiving yet another tax cut,' said. Rep. Morgan Foreman (D-Pittsfield Twp.)
'Almost 64% of the tax cuts for this legislation would go to the wealthiest 20%. This bill does not provide breathing room for hard working Michiganders.…The average amount back for those who make less than $27,000 per year would be an average of $11. $11 can't even buy baby formula. It doesn't make a dent when it comes to the rising prices and helping people make ends meet,' Foreman said.
Schmaltz's House Bill 4170 faces an uncertain future as it heads to the Democratic-led Senate for further consideration.
'Our caucus is focused on lowering costs and supporting Michigan's middle class families — I'm not sure this is the strongest way to do that,' Senate Majority Leader Winnie Brinks (D-Grand Rapids) told the Advance on Wednesday.
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