LANSING, Mich. — State Sen. Michael Webber on Thursday voted to preserve an automatic state income tax rate cut for all Michiganders.
“Many of us were elected on a promise of reducing costs and taxes on Michiganders — they need money put back in their pockets as they continue to face economic challenges,” said Webber, R-Rochester Hills. “In 2015, I voted yes in the state House on the bill to roll back the tax rate on all Michiganders if state revenues exceeded a certain level. Now, through political gamesmanship and maneuvering, that permanent tax relief is at risk.”
Under a 2015 law, an automatic and permanent reduction to the state income tax rate is triggered if revenues in Michigan’s general fund increase past a certain point. The House and Senate fiscal agencies estimate that Michigan was $700 million over the trigger’s threshold in fiscal year 2022, which would reduce the income tax rate from 4.25% to 4.05%.
House Bill 4001, as enrolled, would stop that cut by retroactively moving $800 million from the general fund to a new fund to provide one-time $180 rebates in 2023 and then directing over $1.4 billion over the next three years to the Strategic Outreach and Attraction Reserve (SOAR) Fund. It would also increase the state’s Earned Income Tax Credit (EITC) from 6% to 30% of the federal EITC beginning with the 2022 tax year and phase-in over four years exemption on certain retirement income from the state income tax, such as public retirement or pension benefits.
“I have voted yes on every tax reduction that has been presented in the Senate this session, but I cannot vote yes on a partisan scheme that will take a significant permanent tax cut away from all Michiganders and replace it with an insignificant one-time ‘political relief check,’” Webber said.
###