State Rep. John Roth on Thursday helped advance a proposal that provides needed tax help for workers, families and seniors across Grand Traverse County.
House Bill 4568 and Senate Bill 784 reduce tax burdens in the face of historic inflation and establish targeted exemption reforms to help people keep more of what they earn. Gov. Gretchen Whitmer recently vetoed tax relief measures sent to her by Roth and the Legislature, but the first-term legislator noted people throughout northern Michigan and the state continue to struggle with rising costs.
“Out-of-control costs on gas, groceries, medicine and just about everything else there these days is a real setback for Michigan families and their finances – and it keeps playing out day after day,” said Roth, of Traverse City. “This plan provides real relief and establishes savings for people into the future as opposed to a small drop in the bucket like the one the governor has proposed.”
Highlights of the plan include:
- Income tax cuts for Michigan workers. The Legislature’s plan cuts taxes by $2.5 billion annually by lowering the state income tax rate to 4 percent and allowing single filers to keep an extra $1,800 of what they earn each year tax-free, or $3,600 with joint filers, through increased personal income tax exemptions.
- Additional tax exemptions for seniors. Under the approved plan, 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.
- 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.
- Expanded benefits for military heroes and their families. 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 extend that exemption to an eligible veteran’s surviving spouse and the 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. The state will reimburse local governments for these exemptions, preserving local funding for essential services.
The bulk of the tax plan, contained in House Bill 4568, was approved by the state House and Senate on Thursday and now advances to the governor for consideration. The remainder of the plan in Senate Bill 784 was approved by the Senate and is expected to pass the House early next week.
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