Michiganders to See Largest Tax Break in Decades with Whitmer’s Lowering MI Costs Plan
By Michiganders may soon see the largest tax break in decades, as Gov. Gretchen Whitmer and Democratic leaders announced a framework agreement for tax relief on Friday. The Lowering MI Costs plan would repeal the retirement tax, increase the Working Families Tax Credit, and deliver inflation relief checks to all Michigan taxpayers.
500,000 households can expect to save an average of $1,000 a year with the retirement tax repeal and 700,000 Michiganders will receive an average of $3,150 back with the Working Families Tax Credit increase. The amount of the inflation relief checks has yet to be revealed.[0] A bipartisan agreement is needed for the plan to pass.
Whitmer said the plan will “impact and benefit every taxpayer across the state” and Senate Minority Leader Aric Nesbitt, R-Porter Township, expressed his “cautiously optimistic” attitude towards the proposal.[0] The plan would also increase the Earned Income Tax Credit for families making less than $57,000 a year, averaging savings of $2,467 in Michigan.[1]
The tax relief follows a record $9 billion surplus for the state, with House and Senate Republicans calling for a broad tax cut for Michiganians and the preservation of the potential automatic drop in the personal income tax rate.[2] To preempt the tax cut, the Whitmer administration proposed diverting $800 million of tax revenue towards the state’s economic incentive fund for fiscal year 2022, with another $500 million investment annually for three consecutive years.[3]
Though Whitmer and her legislative lieutenants declined to confirm the proposed tax package or the amount of the proposed tax rebate checks, Whitmer said she “anticipates and looks forward to bipartisan support” for the plan. She added that “everyone in the Legislature is going to want to be a part of” the opportunity to quickly get money into people’s pockets.[4]
The plan is expected to deliver the biggest tax relief to Michiganders in decades and could potentially help ease the effects of inflation. Michiganders will have to wait for the details of the plan to be revealed, and the bipartisan agreement needed for it to pass, before they can determine the full impact of the Lowering MI Costs plan.
0. “Whitmer, Democrats propose tax cut package | News/Talk/Sports 94.9 WSJM” News/Talk/Sports 94.9 WSJM, 3 Feb. 2023, https://www.wsjm.com/2023/02/03/whitmer-democrats-propose-tax-cut-package/
1. “Business group to Michigan Legislature: Extend tax cuts to more seniors” Bridge Michigan, 1 Feb. 2023, https://www.bridgemi.com/michigan-government/business-group-michigan-legislature-extend-tax-cuts-more-seniors
2. “Democrats may seek to head off potential Michigan income tax cut” MLive.com, 31 Jan. 2023, https://www.mlive.com/politics/2023/01/democrats-may-seek-to-head-off-michigan-income-tax-cut.html
3. “Michigan tax cut: Deal could emerge next week. It's messy. What to know” Bridge Michigan, 1 Feb. 2023, https://www.bridgemi.com/michigan-government/michigan-tax-cut-deal-could-emerge-next-week-its-messy-what-know
4. “Michigan tax cuts could total $1.6B, Witwer says” City Pulse, 2 Feb. 2023, https://www.lansingcitypulse.com/stories/michigan-tax-cuts-could-total-16b-witwer-says,39459?
