Snyder's Tax Proposals Upset Some, Win Support From Others

By: Liam Martin Email
By: Liam Martin Email

LANSING -- As Gov. Snyder delivered the first budget proposal of his inaugural term, various groups were already plotting their responses.

Many Thursday tell News 10 they are not surprised, but disappointed, in the governor's approach on tax reform, saying he's proposing $1.8 billion in breaks for business (through elimination of the Michigan Business Tax) by placing extra weight on senior citizens and the poor.

"Big tax increases [by subjecting public/private pensions to state income taxes] along with a drastic reduction in funding to local governments -- all to go toward a big tax break for business," said Eric Schneidewind of the Michigan AARP.

He and retiree groups across the state are especially upset about that plan to tax pensions, noting many seniors live on fixed incomes and won't be able to shoulder that extra burden.

In addition, Snyder's plan calls for the elimination of the Earned Income Tax Credit, expected to save the state about $330 million, but depriving some low-income families of a needed bonus -- though Snyder's administration points out the federal EITC will remain in place.

"The policy, which is essentially intended to get people back to work, is a good one," said Lt. Gov. Brian Calley. "We think the federal EITC accomplishes that goal."

Other changes include the elimination of tax credits for film and brownstone redevelopment and a stop to future reductions of the individual income tax, which would drop from 4.35 percent this year to 4.25 percent.

The MBT, meanwhile, would be replaced with a flat 6 percent corporate tax, though many smaller businesses across the state would pay nothing.

Snyder says his tax plan, along with cuts to a number of state services, will balance the budget.


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