State Rep. Julie Calley today voted to approve an expanded plan to cut taxes for all Michiganders and offer additional relief to families and seniors on fixed incomes.
Calley, of Portland, said the revised plan will reduce the state’s income tax rate to 3.9 percent, offer a new $500-per-child tax credit, and provide additional individual and retirement income exemptions for Michigan seniors.
“As inflation soars, Michigan families and seniors on fixed incomes are struggling to afford everyday essentials,” Calley said. “People need relief now more than ever before. With a multi-billion-dollar budget surplus, the state is in a great position to cut taxes so people can hang onto more of their hard-earned money.”
Details of Senate Bill 768 include:
- Increasing the income tax exemption for seniors. Currently, residents age 67 and older are eligible to receive a tax exemption for their first $20,000 in total income, or $40,000 for those filing jointly. This plan lowers the age of eligibility to 62 and adds an additional exemption for retirement income. With the two exemptions under the plan, a person 62 or older with retirement income is eligible for $40,000 for single filers or $80,000 for joint filers.
- Offering Michigan families a $500 child tax credit for each dependent age 18 and younger. Between the income tax reduction and the new child tax credit, an average family of four in Michigan could receive around $1,150 a year in tax relief under the plan.
- Reducing the personal income tax rate to 3.9 percent from the current 4.25 percent starting in the 2022 tax year. This would return nearly $1.1 billion to Michigan taxpayers in the first year. The cut follows through on a previous promise to restore the rate to 3.9 percent after it was raised in 2007 during Gov. Jennifer Granholm’s administration.
Calley also voted for a measure that sets aside $1.5 billion to reduce debt and improve the finances of public employee retirement systems that taxpayers fund. Most of the one-time funding would go to pension plans for local and county governments and road commissions. To receive funding, a municipality will be required to have best practices in place that allow them to make ongoing contributions, and there is a claw-back provision that kicks in if a community revises its plan.
An additional $250 million will be set aside for grants to communities who already have their pensions funded at a certain percentage. This serves as a merit-based model for fiscal responsibility and will allow these communities more flexibility to fund their pensions even better or pay off other debts under certain circumstances.
State Rep. Julie Calley recently led the House in approving a plan to allow judges who oversee Michigan’s treatment courts to discuss the use of medical marijuana with participants.