Whitmer Wants $500 Tax Rebates, Legislature Pushing $2.6 Billion Tax Break

After Governor Gretchen Whitmer vetoed their last tax break plan in March, the Republicans in the state legislature are coming back with another one.

Tax Break Plan Pkg 5 19 2200 01 09 22still001This plan would be somewhere between a $2.5-2.7 billion tax cut, with more money for families, veterans and seniors.

The Republicans in the legislature tried for a $2.5 billion tax cut in March. Governor Whitmer said no, certain areas were not enough.

“So we looked at what she said, when she vetoed it, and I think if you look at our plan, we incorporated it right?” said Rep. Matt Hall, chair of the House Tax Policy committee, “We put the Earned Income Tax Credit at 20%, which I think might be even more than what she asked for.”

It was never directly negotiated with her but GOP leaders say they listened to her.

“So it would make a lot of sense for her to sign it,” said Hall.

While the details were being ironed out Thursday morning, Whitmer pushed her own plan. This one would give a $500 rebate directly to Michiganders right now. It is not clear if it is every person, every tax payer or household.

“I think what she’s saying is $500 per family,” said Hall, “And that’s a pretty weak plan.”

Whitmer’s plan is immediate, the legislature’s plan would take effect in a year but be ongoing.

“It’s about $1,300 for the average family of four,” said Hall.

Whitmer says the plan is unsustainable, there’s no guarantee the money will be there in future years.

“We had accounted for a pretty sizable tax cut in the budget,” said Hall, “And then they just found billions of dollars.”

Hall’s referring to the reports of the Consensus Revenue Estimating Conference showing more than a$2 billion surplus coming this year.

“The cost of everything is up so that means there’s more sales tax being brought in,” said Rep. Jack O’Malley, “That’s where this is all coming from and it’s coming out of the pockets of folks and we’re saying let’s figure out ways to put it in their pockets.”

There’s a lot of money available so the question remains why not do both plans? Small immediate relief and a long term sustainable plan? It seems possible.

“We’re just getting started,” said Hall, “I’m hopeful we’ll see more tax cuts.”

The Senate passed both House Bill 4568 and Senate Bill 784 along party lines except for Sen. Jim Stamas voting no against the Senate Bill. The House was only able to vote on HB 4568 Thursday and it passed with 14 Democrats joining every Republican with ‘yes’ votes.

According to a press release from the House Republicans, this is what the tax plan would include:

  • A $500 per child tax credit for those under 19.
  • Increasing the personal income tax deduction by $1,800.
  • Raising the personal exemption for seniors 67 and older to $21,800 for individuals and $43,600 for couples and tying subsequent increases to the rate of inflation.
  • Lowering the state income tax to 4%.
  • Restoring the Earned Income Tax Credit to 20%.
  • Ensuring 100% disabled military veterans and the spouses of those killed in action receive a 100% property tax exemption and setting a $2,000 cap for veterans more than 50% disabled but less than 100% disabled, while holding local governments harmless.