LANSING, Mich. — State Sen. Jonathan Lindsey on Thursday voted to protect the automatic income tax reduction for all Michigan taxpayers.
“Conservative leadership and responsible budgeting paved the way for a tax reduction for every working Michigander who sends their money to Lansing,” said Lindsey, R-Allen. “The state government is sitting on a pile of taxpayer money, and instead of helping residents who are struggling with the cost of living, we’re seeing more Democrat games that purposefully obstruct a promise made to residents and then bribing them with a one-time check.”
Under a 2015 Republican law, an automatic and permanent reduction to the state income tax rate is triggered if revenues in Michigan’s general fund increase past a certain point. State revenues have since reached record numbers and, in turn, would reduce the state’s income tax rate from 4.25% to 4.05%.
House Bill 4001 would stop the income tax reduction from taking effect by retroactively moving $800 million from the general fund to a new fund to provide one-time $180 rebates in 2023 and would move more than $1.4 billion to the Strategic Outreach and Attraction Reserve Fund over the next three years.
Also now included in the plan is an increase the state’s Earned Income Tax Credit from 6% to 30% of the federal EITC and a phased-in exemption on certain retirement income from the state income tax, such as public retirement or pension benefits — which were their own pieces of legislation, but have now been lumped together into a large spending bill.
Lindsey said the people who earn their money are far better at spending it than the government and he wanted to see an even stronger effort than what the automatic tax reduction would offer.
“I’d prefer an effort that prevents the government from taking so much of people’s money in the first place,” Lindsey said. “The last thing we need is a long, phased in effort that moves money here or there and eventually gets relief to people. We need conservative policies that allow people to thrive by keeping more of the money they earn.”
The senator has maintained that he will not support any effort that would eliminate the automatic income tax rate rollback, and even introduced an amendment to fully eliminate the state’s income tax to ensure fair, simple tax relief for everyone. The effort was voted down by Senate Democrats.
“What this body approved today picks winners and losers out of a pot of money that everyone paid into,” Lindsey said. “It’s disgraceful how hard the Democrats have worked to make sure this automatic rate reduction doesn’t take place and I have stood against this brazen effort from the moment it was introduced. I am proud to have voted no on this backroom plan that leaves countless Michigan families with nothing at all and further grows state government.”