Measures offer additional exemptions for seniors, protect pensions
State Rep. Sarah Lightner today helped advance a new House plan giving all Michiganders a significant tax break.
Lightner, of Springport, said the plan will honor the promise of rolling back the state income tax to 3.9 percent from 4.25 percent and offer additional individual and retirement income exemptions for Michigan seniors.
“Everyone is hurting as the cost of everyday essentials continue to rise. We feel the pinch of inflation each time we fill up our gas tanks or run to the grocery store,” Lightner said. “With a multi-billion-dollar surplus, the state is in the position to provide relief. My priority is on delivering comprehensive and sustainable tax reforms that allow working people and seniors to keep more of their hard-earned money.”
Details of the plan include:
- 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.
- Increasing the income tax exemption for those age 62 and older. 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.
- A $1.5 billion investment to reduce debt and improve the finances of public employee retirement systems. Most of the one-time funding would go to pension plans for local governments and road commissions, with an additional $350 million to improve financing in the Michigan State Police retirement system. This ensures people who earned pensions will continue receiving them and won’t have to take a cut to their pension due to the insolvency of the plans.
A member of the House Appropriations Committee, Lightner voted to advance part of the plan to the full House, where it will receive further consideration next week.
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