Legislature’s plan returns more than $2.5 billion to people who need it most
State Rep. Andrew Fink helped approve a plan today that would provide much-needed tax relief for families, seniors, workers and veterans in Michigan.
Fink, R-Adams Township, said the more than $2.5 billion tax cut plan – made possible by an unprecedented state revenue surplus – will allow people to keep more of their own money at a time of historic inflation rates.
“As a parent, I can sympathize with the growing costs families are facing at the gas pump and the grocery checkout,” Fink said. “With state revenue at a historic high, there’s never been a better time to offer tax relief. It’s time to deliver real solutions to families and seniors by allowing them to keep more of their own money.”
Highlights of the plan include:
- Income tax cuts for Michigan workers. The Legislature’s plan lowers the individual income tax rate from 4.25% to 4% and increases the personal income tax exemption by $1,800 for single filers and $3,600 for joint filers.
- Relief for working families. Families would be eligible for a new $500 nonrefundable tax credit for each dependent 18 years old or younger. The state Earned Income Tax Credit, which offers savings for lower-income families and individuals, would increase from 6% to 20% of eligible income — a change the governor has previously supported. Restoring the state Earned Income Tax Credit to 20% of eligible income will deliver an average state and federal refund of nearly $3,000 to more than 730,000 working people.
- Additional tax exemptions for seniors. Under the plan approved today, residents age 67 and older who may currently deduct $20,000 of income individually or $40,000 jointly would be eligible for an increase of $1,800 or $3,600, respectively, with future increases automatically adjusted for inflation.
- Expanded benefits for veterans. Under current state law, a veteran with a permanent and total disability resulting from military service is exempted from paying property tax on their home. The plan would extend that exemption to an eligible veteran’s surviving spouse and the spouse of a veteran killed in action. Veterans with a disability determined to be between 50% and 100% would be eligible for a property tax credit up to $2,000. The state will reimburse local governments for these exemptions, preserving local funding for essential services.
The bulk of the tax plan, contained in House Bill 4568, was approved by the state House and Senate today and now advances to the governor for consideration. The remainder of the plan in Senate Bill 784 was approved by the Senate and is expected to pass the House early next week.
Twice this year, the Legislature has sent tax relief proposals to the governor only to see them vetoed. Fink urged the governor to sign the plan providing much-needed relief to residents.
“Time and again, Gov. Whitmer has vetoed our attempts to reduce the income tax burden on Michigan’s working families – but thanks to systems put in place by Republican legislators in 2015, reductions will happen without requiring her signoff.”