Michigan Senate approves tax break bill
The Michigan Senate voted Tuesday to approve a series of tax breaks.
Among the changes, the corporate income tax rate would be lowered from 6.0% to 3.9%. The individual income tax rate would drop from 4.25% to 3.9%.
State Sen. Aric Nesbitt (R-Lawton) sponsored the legislation. He said the state can absorb the expected loss in revenue. The tax cuts are projected to make a multi-billion-dollar dent.
“When you invest in Michigan workers, when you invest in Michigan small businesses, you grow the economy and add more people. We’ve got to get growing again. You can’t keep just slicing up the same size of the pie. We’ve got to grow that pie here in the State of Michigan,” Nesbitt said.
But Senate Minority Leader Jim Ananich (D-Flint) said the tax cut would benefit large corporations more than struggling small businesses and everyday people.
“It’s tone-deaf to where people are at. People are struggling to pay their gas, their groceries. That’s where people are struggling at. If you’re making record profits and you reduce their taxes, that doesn’t do anything for people,” Ananich said.
In addition to lowering the individual and corporate income tax rates, Nesbitt’s bill would also allow people aged 67 and older to receive a deduction against $30,000 in income on a single income tax return. Those filing joint returns could receive deductions for $60,000 in income.
Both amounts would be adjusted for inflation starting in the 2023 tax year.
“This is something where, you look at the overall tax cut, the vast majority of it’s going to working families. The vast majority of it is. This is about competing and winning against other states next to us,” Nesbitt said.
His bill would also allow taxpayers a $500 income tax credit for each qualified dependent.
Ananich said he supports that part of the bill, but he wishes more Democratic input had been involved in the process.
“That’s why you sit down and talk about it, right?” Ananich said. “Tax policy should be done together. It should be done in a way that actually gets people a reduction in their taxes. Not something that they know is never going to get done,” Ananich said.
The bill passed the state Senate Tuesday along a party-line vote.