Income Tax Reduction Clears Committee, Goes To Full State Senate

Jan 29, 2014

Plans to reduce Michigan’s income tax rate are moving forward in the state Legislature.

A state Senate panel approved a bill Wednesday that would phase in the tax cut over three years.

We have more from The Michigan Public Radio Network’s Jake Neher.

The income tax rate would go from 4¼% to 3.9% by 2017. The legislation was introduced months ago, but it has been gaining support since state officials announced a large budget surplus.

Scott Hagerstrom is with the anti-tax group Americans for Prosperity of Michigan.

“This is a tax on work,” he says.  “You want more of something? Tax it less. We want more work and more productivity.”

The non-partisan state Senate Fiscal Agency says reducing the income tax to 3-point-nine percent could cost the state almost $900 million a year when it’s fully implemented. Opponents of the proposals say that money should go to cash-strapped public schools and local governments.

The bill now goes to the full state Senate.