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Income tax cut defeated in Republican-led Michigan House

MICHIGAN.GOV

 

The Republican-controlled Michigan House has failed to approve an income tax cut, rejecting the plan early Thursday after a lengthy session and the unsuccessful cajoling of some resistant members of the majority.

LANSING, Mich. (AP) — The legislation would have lowered the 4.25 percent tax to 4.05 percent by 2019 and then to 3.9 percent by 2021 as long as the state savings, or rainy day, fund doesn't fall below $1 billion. The fund has $734 million now but could grow to more than $1 billion in the next fiscal year.

The 52-55 vote at 1:45 a.m. — three short of the number needed to move the bill to the GOP-led Senate — came after several revisions to the measure. Republican Gov. Rick Snyder had voiced concerns about the budget implications of a tax cut.

"It's unfortunate. We wanted to produce legislation that was going to bring income tax relief to the hard-working taxpayers of this state," House Speaker Tom Leonard told reporters after the measure's surprise defeat.

As passed by a House committee last week, the bill would have cut the tax to 3.9 percent next year and phased it out completely by 2057. But GOP leaders could not muster support in the full chamber and on Tuesday amended the bill to reduce the tax to 3.9 percent over four years and to end the bid for full elimination.

Republicans changed the legislation some more early Thursday before the vote, which capped a 12-hour late-night session that was rare so early in a new two-year term. With all but one Democrat opposed, Leonard spent hours trying to coax hold-out GOP members.

But 12 in the 63-member caucus voted no. Leonard said he called for the vote knowing it would likely fail — an unusual move as opposed to instead clearing the voting board once support was lacking — because "I had an overwhelmingly majority of my caucus that wanted to let the world where they stood in terms of defending taxpayers in this state."

The bill could be revived later, though Leonard said the House would next work on Snyder's budget proposal in coming months and tackle other big agenda items.

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