LANSING – State Representative Shane Hernandez (R-Port Huron) introduced legislation today which uses the concept of business tax incentives that passed the Legislature earlier this term and extends them to all Michigan citizens and small business owners. He is affectionately calling the bill “My Thrive”.
“What MY THRIVE does is to allow citizens to pay state taxes on the rolling three year average of their adjusted gross income.” said Hernandez. “Earlier this session, the legislature passed “MIThrive” and “Good Jobs” legislation, which were tax breaks on new jobs and economic activity for corporations. I see no reason why, if this can be done for them, we cannot give all individuals a tax break on new income they earn. Considering many recent reports of increased wages and bonuses nationwide, there is no better time to do this.”
The way the plan works is that beginning in 2018, if an individual (or small business) makes $20,000 this year, $30,000 next year, and $40,000 in year three, they would pay taxes on $20,000 this year, $25,000 next year, and $30,000 in year three, the average of the current year and the previous 2 years.
Citizens who’s income goes down from a previous year would pay taxes on the lower amount (would not be forced to average their income). So in this way, no one would ever pay MORE taxes under this bill.
“The state budget will not be negatively affected by this bill, since by definition – individuals will only get a tax cut based on how much their income increases,” Hernandez continued, “So the state is guaranteed not to lose tax revenue from where we are today.”
Under the Hernandez legislation, anyone who moves from another state, or enters the workforce for the first time would be able to average an income of zero dollars for the previous years. Meaning this bill will incentivize more people to enter the workforce, and help attract more workers and business investment to Michigan.