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Tuesday, March 31, 2020

Wakeman proposes House Bill cutting income tax rates

Politics

By Kimberly James | Feb 12, 2020

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State Rep. Rodney Wakeman (R-Saginaw Township) has proposed a bill that would cut the state income tax rate to 3.9 percent in 2021 and lower the rate by 0.1 percent each subsequent year until it reaches zero.

Wakeman says House Bill 5337 would fulfill previously promised tax relief and allow families to keep more money in their pockets.

Michigan first enacted state income tax in 1967 at a rate of 2.9%. The rate has risen and fallen over the years, peaking in 1983 at 6.35% in 1983 and, at other times, hovering just above 4%, The Center Square reports.

In 1999, the Legislature voted for a similar proposal that would cut the tax rate 0.1% each year for five years until the rate reached 3.9%, but because of the state's economic depression, the governor temporarily reverted the rate to 4.35%.

Similar measures were proposed to lower the tax rate to 3.9% by 2015, but the amendment to the Income Tax Act in 2012 set the rate at its current 4.25%.

President of Americans for Tax Reform Grover Norquist told The Center Square that it is the current administration's responsibility to make good on the promise of the previous governor to lower income taxes. He thinks the way of the future is for Michigan and other Midwestern states to follow in the path of Texas, Florida, Nevada and Tennessee who don't have state income tax. 

Wakeman said the request he's received most since taking office concerns tax relief.

“This is about restoring people’s trust in government by making good on a promise made to Michigan taxpayers over 10 years ago," Wakeman told The Center Square. "For too long, tax spenders have gotten their way. Now it’s time to give hard-working families a break by delivering long-overdue tax relief.” 

Neither the House or Senate fiscal committees have reviewed the bill, but the measure is expected to be reviewed by the House Tax Policy Committee.

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