ANN ARBOR — State Representatives Gretchen Driskell (D-Saline), Jeff Irwin (D-Ann Arbor), David Rutledge (D-Ypsilanti) and Adam F. Zemke (D-Ann Arbor) today announced the House Democrats’ plan for middle-class tax relief. The bills, based on Michigan’s Middle Class Plan, are focused on restoring tax credits and deductions to middle-class families and repealing taxes on retirees. Legislation included in the plan will relieve the tax burden on Michigan families when next year’s tax season rolls around.
“When filing their 2012 taxes, many families and seniors are seeing a significant increase in their tax burden. This means many residents have to make do with less,” Driskell said. “The legislation we’re introducing would address this inequity.”
Last session, the Legislature made severe changes to the Michigan tax code punishing middle-class families and seniors, including imposing a tax on retirement income, eliminating the Homestead Property Tax Credit for many families, a drastic cut to the Earned Income Tax Credit and the elimination of the $600 per-child tax deduction and tax credits for charitable donations. These changes were made to fund nearly $2 billion in tax breaks for big corporations, effectively making Michigan’s low-income and middle-class families pay for a handout to big corporations. The new taxes took effect in 2012, and many taxpayers became aware of them for the first time as they filed their state income taxes this year.
“People across Michigan are seeing reduced refunds or actually have to submit a payment, while corporations are paying much less than they used to,” Irwin said. “This tax shift hasn’t helped create jobs, so we need to reverse it and put that money back where it’ll do the most good – into the pockets of middle-class families.”
Over the past two months, Democratic state representatives heard the concerns of struggling Michiganders during their Real State of Our State Listening Tour. After the tour’s completion, legislators used this feedback to construct Michigan’s Middle Class Plan, including the following tax initiatives:
- Repeal the new tax on senior retirement income
- Require employers to inform employees about the Earned Income Tax Credit
- Restore the Earned Income Tax Credit to 11 percent in the first year
- Restore the Homestead Property Tax Credit
- Restore the child deduction
Along with these initiatives, the House Democrats pledge to continue fighting against tax increases on the middle class and seniors every time a new, harmful tax is introduced to the Legislature, and to keep Michigan taxpayers aware of the changes through a series of town halls held across the state.
“The economy is starting to turn around, but we can’t afford to derail that recovery by putting a bigger tax burden onto families and seniors,” Rutledge said. “We will work to protect hard-working Michiganders from arbitrary increases in taxes that do nothing to invest in the programs and systems that could make their lives better.”
Zemke added, “Putting money back into the pockets of middle-class families means that more can be spent at local businesses –the real drivers of economic growth. Our plan will help Michigan families thrive, and they, in turn, will support small businesses. It’s a win-win situation.”