The GOP majority in Lansing is pushing to reduce state income taxes, something that has gotten the support of representative Greg Markkanen. Senate Bill 768 helps drop the rate for workers and also provides seniors with additional exemptions.
Under the Republican plan, the income tax rate would be slashed from 4.25% to 3.9%, resulting in $1.1 billion in savings for the state’s workers. Markkanen says that it is a prudent way to help offset the effects of inflation. The Consumer Price Index, as measured by the United States Bureau of Labor and Statistics, was recently calculated at 7.5%, the highest in generations. Prices at the pump are soaring, nearing $4 per gallon at several stations in the Keweenaw, and that will only serve to pressure expenses further.
Another aspect of the plan is to lower the age to claim income exemptions. The GOP wants to allow anyone 62 years or older to be waived from paying taxes related to funds for retirement, up to $80,000 for those filing jointly. Retirement income includes pension benefits, individual retirement accounts, social security and other government income, among other sources.
You can read the full release below.
State Rep. Greg Markkanen is working to provide relief for workers, families and seniors across the U.P. through lower taxes and other key reforms.
On Tuesday, Markkanen voted to approve Senate Bill 768, which cuts income taxes for Michigan workers and provides genuine tax savings for retirees. It also creates a nonrefundable child tax credit worth $500 for each qualified dependent.
“Inflation has had an impact on everyone, and we needed to respond with a plan that provides real relief to everyone,” said Markkanen, of Hancock. “I have heard from many people across the western U.P. about the prices of everyday items like gas, groceries and medicine. This is going to allow people to keep more of what they earn and help with their finances.”
The plan reduces the income tax rate from 4.25 percent to 3.9 percent for all individual payers, which would return nearly $1.1 billion to Michigan taxpayers in the first year. A larger number of seniors would also receive additional relief through a combined $600 million in exemption reforms. The income exempted from taxes for people 62 and older would rise to $20,000 for individual filers and $40,000 for joint filers, instead of those 67 and older under current law.
An additional exemption would be applied specifically to retirement income – also at $20,000 for single filers and $40,000 for joint filers. With the two exemptions, a person 62 or older with retirement income is eligible for $40,000 for single filers or $80,000 for joint filers.
The plan works with corresponding legislation to provide debt relief for local government employees totaling $1.5 billion in one-time funding. The proposal, HB 5054, helps ensure more pensions will actually exist and be sufficiently funded for municipal workers who have earned them, such as police and fire.
“These were promises made to workers who helped keep our communities safe and running efficiently – and it’s important to make sure those promises are kept so people have the retirement benefits they earned and need,” Markkanen said.
The legislation will advance to the governor for consideration once approved by the House and Senate.