House Moves Plan to Reduce Income Tax

Liz Gullett

Feb 25, 2022

The House Appropriations Committee reported legislation this week reducing the income tax rate from 4.25% to 3.9% for all individual payers. The bill, introduced by House Tax Policy Chairman Matt Hall (R-Emmett Twp.), would reduce the state revenues by an estimated $1.7 billion annually. Additionally, the proposal would exempt income from taxes for people 62 and older to $20,000 for individual filers and $40,000 for joint filers. Currently, such an exemption exists for people 67 and older. The legislation adds an additional exemption on retirement income for $20,000 for an individual filer and $40,000 for joint filers. The bill was sent to the House floor for further consideration. The Senate passed legislation last week reducing the corporate and income tax rates to 3.9%.

During a committee hearing on the proposal, Republicans lauded the proposal stating that tax relief is needed for Michigan residents across the board. However, Democratic members stated that the tax relief for those in the lower- and middle-income brackets would be minimum, approximately $12 per year for some residents. They were more in favor of other forms of tax relief that would have targeted residents they felt are most in need of relief, such as removing the pension tax or instituting a graduated income tax.

Michigan Legislative Consultants is a bipartisan lobbying firm based in Lansing, Michigan. Our team of lobbyists and procurement specialists provide a wide range of services for some of the most respected companies in America. For more on MLC, visit www.mlcmi.com or connect with us on LinkedIn and Twitter.