MIDLAND, Mich. — State fiscal experts announced today at the Consensus Revenue Estimating Conference that a potential unplanned surplus could trigger an automatic decrease to Michigan’s personal income tax rate. Officials won’t know the exact status of the surplus or rate deduction until later this year. Below is a statement from Michael LaFaive, senior director of fiscal policy at the Mackinac Center.
“As Michigan families continue to face high grocery bills, energy costs, and interest rates, it’s only right that they get to keep more of their hard earned money. Reducing the income tax rate to 4.05% would be a start, but the state should keep its promise to taxpayers and roll the income tax rate back to 3.9%. An automatic trigger would do what Governor Whitmer refused to do and gives personal income tax relief to all Michigan workers.”
Governor Gretchen Whitmer vetoed legislation last year that would have rolled the income tax rate back down to 3.9%. In 2007, former-Governor Jennifer Granholm raised the income tax rate to 4.35%, with a promise to lower the rate back down to 3.9%. However, as part of Governor Snyder’s 2011 tax reforms, the planned rate declines were halted and the current rate is 4.25%. The Mackinac Center has long supported lowering the personal income tax rate.
To learn more about tax reform and other fiscal policy recommendations, click here.
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