Michigan Legislature passes $1B tax plan, now heads to Gov. Whitmer’s desk
The bill will overhaul the retirement tax, expand the Working Families Tax Credit, and make significant investments in housing and community development.
LANSING, Mich. (WILX) - Thousands of retired Michiganders and working families are set to receive a tax break with the passage of the bipartisan “Lowering Michigan Costs Plan.”
Late Tuesday night, Senate Democrats finalized the biggest tax relief initiative Michigan has seen in decades, sending the Lowering MI Costs Plan to Gov. Gretchen Whitmer for her signature into law.
House Bill 4001 will overhaul the retirement tax, expand the Working Families Tax Credit, and make significant investments in housing and community development.
The state’s personal income tax was automatically set to drop from 4.25% to 4.05% prior to this bill. The plan will keep that intended drop and not include the $180 rebate checks Democrats asked for.
Republican Senate leader Aric Nesbitt said, “Today, Senate Republicans protected the automatic income tax rollback that is due to millions of Michigan residents who need permanently lowered taxes, not a one-time gimmick that disappears in one trip to the grocery store.”
“Today, we are sending the governor the biggest, broadest tax relief plan Michiganders have seen in decades,” Senate Majority Leader Winnie Brinks (D-Grand Rapids) said. “This has the power to make a generational impact on the financial well-being of individuals and families in our state. With less than two months in the majority under our belts, Democrats are already delivering on our long-held promises to help household budgets stretch further.”
A key component of the bill will expand the Working Families Tax Credit to 30% of the federal Earned Income Tax Credit. 700,000 Michiganders will see an average of $3,150 dollars back in their pockets.
“The Working Families Tax Credit is a proven, bipartisan tool to lift working families out of poverty and has widespread cross-sector support,” said Sen. McDonald Rivet. “The policy’s effectiveness, track record, and nearly universal endorsement make it the perfect policy to address the needs of struggling Michiganders to counter inflation and to bolster small businesses still grappling with job vacancies.”
The Lowering MI Costs Plan also invests $50 million of surplus tax revenue in the state’s Housing and Community Development Fund, prioritizing projects offering veterans, seniors, people with disabilities, and working families safe, affordable places to call home. The plan also provides $50 million for Revitalization and Placemaking (RAP) grants to turn underutilized office, commercial, or community space into places for people to enjoy, including affordable housing, parks, outdoor dining spaces, community gathering places, and more.
“From our kids to our seniors and everyone in between, this plan will have a major impact on our state,” said Sen. Mallory McMorrow (D-Royal Oak). “This historic legislation tackles longstanding Democratic policies to provide significant support to our fellow Michiganders who need it the most. Lowering MI Costs also makes key investments in housing, parks, community spaces, and other pieces of a holistic, reenvisioned approach to economic development.”
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