LANSING – Under Michigan House Republican legislation to be introduced on Tuesday, a reduction in the personal income tax rate would take effect October 1, three months earlier than scheduled, and boost the personal exemption.

Bills on both issues will be introduced by freshman members running for reelection in competitive districts.

The plan calls for the personal income tax rate to fall from 4.35 percent to 4.25 percent October 1, and will be sponsored by Rep. Ed McBroom (R-Vulcan).

The personal exemption would rise from $3,700 per person to $3,950 per person on October 1. It would then increase by $50 effective January 1, 2014, and see a $100 increase effective January 1, 2017. That bill will be introduced by Rep. Holly Hughes (R-White River Township).

“Every dollar state government has is a dollar earned by a hardworking Michigan taxpayer.” House Speaker Jase Bolger (R-Marshall) said in a statement. “We have a responsibility to spend taxpayer money wisely and return any additional money rather than finding new ways to spend it.”

Ari Adler, Bolger’s spokesperson, said this would use up the $90 million made available in the budget targets agreed to on Wednesday that Bolger had been pushing for.

He said it depends on each family and how much family members earn as to how much people will receive from the tax plan, but a family of four, including two dependents, would see $1,000 that would not be subject to tax at the end of the year due to the increase in the exemption.

“It is important that as we move forward with tax relief that we do something designed to help working-class families,” Hughes said in a statement.

House Minority Leader Richard Hammel (D-Mount Morris Township) said in a statement that Michigan taxpayers deserve more than the GOP plan offers.

“The Republicans proved they still can’t relate to the average Michigan middle-class family by offering a tiny tax cut that wouldn’t help an individual let alone a family,” Hammel said. “Twenty dollars won’t buy prescription medicine, won’t fill up a gas tank and won’t help working families who lost hundreds of dollars with the drastic cut to the Earned Income Tax Credit. While we are glad that they realize that we need a tax cut, they still need to do much better and offer one that will actually help average Michigan residents.”

Gilda Jacobs, president and CEO of the Michigan League for Human Service, said the poorest citizens will only see enough money to pay for a couple gallons of gas under this plan.

“It will take $90 million out of the state coffers at a time when we should be investing in our kids and our future when we have the means to do so. While the election-year timing of this tax change is suspect, it really does little to move our state forward at time when families are still struggling and low-income working families have taken a huge hit in tax increases approved by the Legislature and governor last year,” she said in a statement.

Estimates on how much the average person would save on the rate reduction are between $17 and $25 a year, an amount Democrats say is not enough given the huge tax increase individuals were handed last year by the Republicans. Under those tax changes, in fact, the reduction of the income tax to 4.25 percent was delayed by a year.

“Last year’s efforts to bring responsible budgeting back to Lansing, combined with an improving economy, means we have money available to offer broad-based tax relief to Michigan’s citizens,” McBroom said in a statement.

Adler said people have to look at the principle of it.

“If state government has extra money available, we can either find new ways to spend it, or give it back to the people who sent it to us,” he said.

He also said there is a long-term plan in the works to do more to help individual taxpayers, but those plans haven’t been finalized.

Liberal organizations were unimpressed.

“It’s clear Lansing Republicans are desperate to make voters forget about their $1.8 billion corporate tax giveaway, which was paid for by Michigan’s students, seniors, and workers,” Zack Pohl, executive director of Progress Michigan said in a statement. “Fortunately, Michigan voters are smart enough to see through this election year ploy, especially when they realize that $23 won’t even pay for a tank of gas, a box of diapers, or a college textbook. It’s time for Lansing Republicans to stop the political games and focus on real solutions to rebuild Michigan’s economy.”

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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