GRAND RAPIDS, Mich. (WOOD) — Is tax relief in store for Michigan taxpayers? If you listen to the governor and lawmakers, it seems like the will is there — but with all things in the budget, it isn’t as easy as it might seem.
Gov. Gretchen Whitmer, a Democrat, talked about tax relief in her State of the State address in January. Then, the Republican-led Senate passed a bill that would lower taxes. Now, the Republican-controlled House is following suit. They are all talking about reducing taxes, but not necessarily in the same manner.
Politicians always like to talk about reducing taxes and they particularly like it during an election year.
“I’m ready to work across the aisle to roll back the retirement tax and save 500,000 households in Michigan an average of a thousand bucks a year,” Whitmer proclaimed during her State of the State. “Now let’s talk about cutting taxes for people working full time but who still can’t get ahead.”
In response to record revenues and perhaps as much as $7 billion more in the coffers than expected, Whitmer included in her budget proposal eliminating the pension tax and increasing the earned income tax credit to $3,000 for low-income families.
The state Senate is targeting income tax, moving to reduce it from 4.25% to 3.9%, and wants to reduce the business tax from 6% to 3.9%. The Senate plan also raises the tax exemption for retirement income to $30,000 for individuals and $60,000 for couples.
The House agreed that the income tax should be rolled back. The lower chamber would also provide tax relief for all retirees 62 and up at a slightly lower rate than the Senate. The House plan also would target more than $1 billion to help shore up public pension accounts that are currently underfunded.
But will all that, the Senate, House and governor have not agreed to a definitive tax reduction strategy.
Rep. Thomas Albert, R-Lowell, who chairs the House Appropriations Committee, was asked if this was the beginning of the negotiations.
“Absolutely, “ he said. “I think now all three sides have a stake in the ground, and the good thing is we’re all in the same ballpark. So we’re all talking about the same thing, so I think that’s very encouraging.”
The same ballpark, maybe, but on different benches.
The three sides’ debate will be part of the budget negotiations, which many in Lansing want wrapped up early to allow for campaigning this summer. But given this Legislature and governor’s track record on budgets, that may be optimistic.