State Income Tax Could Be Hiked

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People in Michigan would pay 4.6 percent in the state's flat income tax under the plan proposed by Rep. George Cushingberry, Jr. (D-Detroit).

Right now, 3.9 percent of residents' taxable income goes to the state. In 2000, the rate was 4.4 percent. And in 1994, before Proposal A, it was 4.6 percent.

So Cushingberry's plan would bring income tax levels back to where they were in the early 1990s.

It could mean a lot more money for the state.

Based on estimates from the Senate Fiscal Agency, that tax increase could raise close to $1.2 billion a year. It's enough to erase the state's budget deficit without any of the cuts already approved or proposed.

But some mid-Michigan Republicans are firmly against the plan.

"What the people of Michigan want is reform in government," Rep. Rick Jones (R-Grand Ledge) said after a Friday press conference. "They want us to control spending."

Jones and some of his colleagues held the conference to point out that, if the tax hike is passed, residents will pay close to 20 percent more in state income taxes.

"People right now are struggling -- struggling to pay their mortgage, struggling to buy gasoline to power their cars to go to work," Jones said.

Some mid-Michigan Democrats are willing to at least consider the idea.

"It would have to be part of a package that I was convinced would benefit the people of Michigan on a long-term basis and in a way that doesn't hurt the businesses and individuals we're here to help," Rep. Mark Meadows (D-East Lansing) said.

Meadows says the state has to look at tax increases as well as spending cuts to pay for fundamental services like education.

A spokeswoman says Governor Granholm is willing to consider new sources of revenue other than the 2 percent service sales tax she proposed.

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