It looks like those $180 rebate checks proposed for Michigan taxpayers won’t be happening, after all. The Michigan Senate on Tuesday approved a Democratic tax package, but without enough votes to grant it immediate effect, meaning the checks won’t be coming. State Senator Aric Nesbitt tells us Republicans stood firm against the plan in order to force a cut in the state income tax instead.
“Lowering the personal income tax has been a long-term part of my plan to provide inflation relief to Michigan families, and so as much as Governor Whitmer tried to fight the income tax cut, it appears it will be happening and it should be a matter of weeks, if not the next month, where there should be a good announcement,” Nesbitt said.
Under a 2015 state law, if Michigan sees revenue growth above a certain threshold, then the state income tax would automatically be reduced from 4.25% to 4.05%. Legislative Democrats had sought to prevent that — as well as a substantial loss of revenue per year — by instead proposing the rebate checks. Nesbitt says an income tax cut would be better.
“You always want a pay raise instead of a lump sum because you get more out of the coming years than you get out of a one-time payment.”
Nesbitt says the income tax cut will benefit small businesses that file taxes as flow through entities. Also, he says a lower tax rate makes the state more attractive to business. Other parts of the Democratic tax plan will take effect next year include reduced taxes on retirement income and an increase of the Earned Income Tax Credit.
