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Politics & Government

Income tax rollback bill voted out of committee, despite concerns

Tax forms
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Seniors drawing pensions could be taxed under Governor Snyder's new tax proposal.

State House Republicans are aggressively pushing through an income tax cut and rollback, despite numerous questions raised during a committee hearing about what funding cuts could happen in other areas if the bill passes.

A bill that would cut the state income tax and eventually phase it out altogether over 40 years was voted out of committee Wednesday. This happened after an hour and a half of testimony and over requests to hold off on a vote from some Democratic members.

Republican Representative Martin Howrylak is on the Tax Policy committee, which OK’d the bill. He said he’s in favor of tax reform, but the bill is moving too fast.

“We need to have more than, you know, an hour’s worth of testimony,” he said. “And more importantly, I think there’s a better way of balancing out tax relief.”

But committee chair Jim Tedder said the issue of tax cuts is philosophical and he doesn’t think additional time for testimony or deliberations would change any minds.

“The sooner we can rollout this policy plan the better our colleagues in the House, the Senate, and our friends in the governor’s office can work toward achieving meaningful cuts that deliver meaningful reform to Michigan’s tax payers,” he said.

Supporters of the plan, like Tedder said they aren’t worried about balancing the budget down the road.

The looming budgetary question comes after the nonpartisan House Fiscal Agency determined that the plan would save taxpayers (and remove from the budget) 1.1 billion dollars during its first full fiscal year in 2019.

State treasurer Nick Khouri says the tax cuts need to be discussed in tandem with appropriations committees to figure out how to fill that hole in the budget during the first full year the cut would take effect, as well as the multi-million dollar holes in years after.

“The fundamental question is never should taxes be too high or too low,” he said. “The question is what’s the right level, what’s the right combination of services that increase standards of living for all Michiganders.”

Gov. Snyder sent out a statement after today's vote saying he has serious concerns about the bill.

"I was disappointed to see this move so rapidly through committee without giving longer and broader consideration to possible consequences," he said."This is an issue that requires thoughtful discussion with input from throughout the state. I hope the House will be more deliberate before taking a full vote. It's important that each representative has time to hear from their residents and allow them to weigh in before making a decision on a bill that will have statewide impacts for the next 40 years."

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