LANSING, Mich. — Michigan Democrats revealed new details of their tax cut plan in Lansing on Monday.
The Lowering MI Costs plan will focus on three key points, which Democrats hope will help give Michiganders economic relief.
First, the plan will repeal the 4.25% tax rate on pensions. Democratic leaders also said they are looking to equalize exemption for both private and public pensions, where exemptions are currently only available for public pensions.
Second, the state's Earned Income Tax Credit will be increased from 6% to 30% of the federal Earned Income Tax Credit.
Finally, Michigan tax payers will receive a $180 inflation relief check. The relief checks are estimated to cost the state $800 million.
Democratic leaders estimate that repealing the retirement tax would save 500,000 households an average of $1,000 a year. The increase in the Working Families Tax Credit is estimated to put an average of $3,150 back into the pockets of 700,000 Michiganders.
Michigan Democrats shared their thoughts on the announcement:
“The #1 concern for Michiganders right now is costs,” said Governor Whitmer. “Our Lowering MI Costs plan puts money back in people’s pockets by rolling back the retirement tax, quintupling the Working Families Tax Credit, and delivering inflation relief checks to every taxpayer. Getting this done will help people pay the bills and put food on the table as inflation impacts their monthly budgets. I am proud that we are hustling to get this done and deliver real, immediate relief to Michiganders.”
“House Democrats heard from Michiganders across our state that they want us to repeal the retirement tax,” said Speaker Joe Tate. “Their priorities are our priorities. With the passage of this plan, we are making good on our promise to the people of Michigan. Lowering MI Costs gives retirees back their hard-earned money, puts dollars into the hands of working families, and delivers much-needed relief from inflation for people across our state. This is meaningful relief at a time when Michiganders truly need it. I am proud of my colleagues in both chambers and the governor for her leadership to get this done.”
“This announcement is a tremendously exciting moment for Michigan,” said Senate Majority Leader Winnie Brinks. “It includes key promises that Democrats have been talking about in coffee shops and townhalls and at our neighbors’ doors for years. It reflects what we have been hearing from Michiganders and what we have been working to deliver: lowering costs, combating the pinch of inflation, and providing real, immediate relief for the people of our state.”
Michigan Senate Republican Leader Aric Nesbitt released a statement after the democrat's announcement:
“Senate Republicans will continue to advocate for immediate, meaningful and ongoing tax relief that benefits all Michiganders, not some Michiganders. Frankly, when the state is sitting on a $9 billion surplus, we should be doing more than handing out a one-time annual rebate check that equals 49 cents per day.
“I am concerned that Gov. Whitmer continues to fight against the anticipated automatic income tax rollback and push for a limited tax cut for retirees that will leave two-thirds of Michigan’s seniors behind. We should be working together to help all seniors and all families with ongoing tax relief.
“Republicans have proposed tax relief that will benefit all seniors, income tax reductions for all Michiganders, and $500 child tax credits to help struggling families. Democrats continue to push plans that pick winners and losers and seem to think one-time checks are a substitute for ongoing tax relief.
“People can spend their own money far more wisely than the government. Given the state’s historic budget surplus, all options should be on the table for helping all Michiganders with meaningful relief from historic inflation. This money belongs to the taxpayers, not the state of Michigan.”
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