Representative fights for families, wins House approval on tax relief plan

State Rep. Kathy Schmaltz today led the Michigan House in approving her plan to deliver much-needed tax relief to Michigan families and small businesses.

Schmaltz’s plan, House Bill 4170, will lower the state income tax rate to 4.05% as of Jan. 1, 2025, allowing Michigan taxpayers to keep more than $700 million of their hard-earned income every year.

“Families across Michigan are struggling to afford basic necessities — groceries, gas, housing, and child care costs are stretching budgets thinner than ever,” said Schmaltz, R-Jackson. “People need relief, and they need it now. With the state collecting more than enough tax revenue, it’s time to give money back to the hardworking families who earned it.”

Schmaltz’s plan also clarifies a 2015 law designed to provide automatic income tax cuts when state revenues exceed inflation, preventing future administrations from blocking permanent tax relief, as the Whitmer administration did in 2024.

In 2023, an automatic tax reduction lowered the rate from 4.25% to 4.05%, following the intent of the 2015 law. This should have been permanent, according to the law’s architects, including former Gov. Rick Snyder, former House Speaker Kevin Cotter, and former Senate Majority Leader Arlan Meekhof. The nonpartisan House Fiscal Agency also observed at the time that the reduction would be permanent.

However, the Whitmer administration and Attorney General Dana Nessel declared the cut was temporary, ensuring the tax rate would jump back to 4.25% on Jan. 1, 2024, and raising taxes on every Michigan taxpayer.

In addition to reversing this tax hike, Schmaltz’s plan will guarantee that future tax reductions remain intact unless the Legislature explicitly changes them.

Schmaltz pointed out that Michigan has more than enough revenue to afford the lower tax rate. Over the past two years, budget experts have repeatedly announced higher-than-expected revenue coming into the state.

In January, state budget experts announced that Michigan has $850 million more in revenue than previously projected. Schmaltz emphasized that this surplus alone would more than cover the tax cut her plan proposes.

“Instead of hoarding surplus funds, the state should prioritize giving money back to the people who earned it,” Schmaltz said. “Michigan families shouldn’t have to choose between putting food on the table and paying their bills while the state sits on excess revenue. Government shouldn’t be taking more than it needs, especially when people are working harder than ever just to make ends meet. Our plan will put money back in families’ pockets where it belongs.”

Schmaltz’s plan, House Bill 4170, now advances to the Senate for further consideration.

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