Legislature’s plan returns more than $2.5 billion to people who need it most
State Rep. Julie Calley today voted to provide much-needed tax relief for families, seniors, workers and veterans in Michigan.
Calley, of Portland, said the more than $2.5 billion tax cut plan – made possible by an unprecedented state revenue surplus – will put more money in people’s wallets at a time when everyone is struggling under the weight of historic inflation rates.
“I hear from people every day who are worried about the cost of groceries and gas, which seem to get more and more expensive every time you go to the store,” Calley said. “At the same time, the state is facing an unprecedented budget surplus. It’s irresponsible not to cut taxes and return money to taxpayers at a time when they need it most.”
Highlights of the plan include:
- Income tax cuts for Michigan workers. The Legislature’s plan lowers the individual income tax rate from 4.25% to 4% and increases the personal income tax exemption by $1,800 for single filers and $3,600 for joint filers.
- Relief for working families. Families would be eligible for a new $500 nonrefundable tax credit for each dependent 18 years old or younger. The state Earned Income Tax Credit, which offers savings for lower-income families and individuals, would increase from 6% to 20% of eligible income — a change the governor has previously supported. Restoring the state Earned Income Tax Credit to 20% of eligible income will deliver an average state and federal refund of nearly $3,000 to more than 730,000 working people.
- Additional tax exemptions for seniors. Residents age 67 and older who may currently deduct $20,000 of income individually or $40,000 jointly would be eligible for an increase of $1,800 or $3,600, respectively, with future increases automatically adjusted for inflation.
- Expanded benefits for veterans. Under current state law, a veteran with a permanent and total disability resulting from military service is exempted from paying property tax on their home. The plan would also apply this exemption to an eligible veteran’s surviving spouse and a spouse of a veteran killed in action. Veterans with a disability determined to be between 50% and 100% would be eligible for a property tax credit up to $2,000. Finally, the state will reimburse local governments for the veteran exemptions, preserving local funding for essential services.
Part of the tax plan, contained in House Bill 4568, was approved by the state House and Senate last week. The remainder of the plan in Senate Bill 784 was approved by the House today. Both measures will soon be presented to the governor for her consideration.
Twice this year, the Legislature has sent tax relief proposals to the governor only to see them vetoed. Calley urged the governor to sign the plan and provide much-needed relief to residents.
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