House Democrats: Michiganders Deserve Immediate Tax Relief

Republicans playing politics with middle-class families
Thursday, June 14, 2012

LANSING - Members of the House Democratic Caucus today called for immediate tax relief to help many of Michigan’s struggling middle class families. House Bill 5729 gradually lowers the state income tax rate from the current 4.35 percent to 3.9 percent by the year 2018. Last week State Rep. Tim Greimel (D-Pontiac) offered a proposal to provide immediate relief and drop the rate to 3.9 percent by Oct. 1 of this year. The Republicans refused to adopt Greimel’s amendment.

“While we certainly appreciate that the House Republicans agree that Michigan residents deserve a better tax cut, we still believe that we can do more for the hundreds of thousands of families who will still get a smaller tax break than our state’s wealthier taxpayers,” said House Democratic Leader Richard E. Hammel (D-Mount Morris Twp.). “Tax policy shouldn’t be dealt with on the second to last day of session before the summer recess. They have still failed to restore the nearly $1 billon they took from our schools, they have failed to give tax relief to senior citizens living on smaller fixed incomes because of the new pension tax, and we have yet to see one job created by the billions in tax cuts they gave to corporations last year.”

HB 5729 gradually lowers the tax rate from 4.25 percent to 3.9 percent in 2018. The meager tax relief the Republicans have passed to date provides only a nickel a day to most families with their new plan providing only 2 nickels a day next year.

“House Republicans have turned needed tax relief for our middle-class residents into a political game,” said Greimel. “Instead of passing my proposal to cut the tax rate this year when I offered it last week, they waited a day and then introduced their bill sponsored by their vulnerable Lenawee County member. If this was a serious proposal and not pure politics - they would have supported my amendment last week or made it part of the calculations when crafting and passing the 2013 budget.”

Last week the Republicans passed a tax package that lowered the tax rate to 4.25 percent on Oct. 1, 2012, and increased the personal exemption by a nominal amount. That plan and the current proposal, however, help higher wage earners more than middle - or low- income workers because of how Michigan’s tax structure works. Democrats have consistently argued for tax policy that will give more money back to those citizens who earn less and would benefit more from tax cuts.

“A few nickels a day won’t begin to make up for the loss that families and senior citizens are feeling thanks to the tax increases that the Republicans approved last year,” said Rep. Mark Meadows (D-East Lansing). “No one wants to turn down a tax cut, but we need to do a much better job of paying for the tax cuts and targeting them to those who need it the most. This is clearly a defensive reaction to the criticism of their miniscule tax cut already enacted and a ploy to help save their jobs in a tough election year.”

“Struggling families deserve better than election year games, and if they were serious about tax fairness we would be fixing the damage they did to Michiganders last year by repealing the senior pension tax, and restoring the Earned Income Tax Credit and the child deduction,” said House Democratic Floor Leader Kate Segal (D-Battle Creek). “We need a tax policy that helps the majority of our residents and not just the favored few that the Republicans continue to target for tax relief.”