LANSING – State Representative Andy Schor (D-Lansing) introduced a bill today to increase the personal exemption by $100 that people can claim when filing income taxes starting in 2014.

“While my preference is to use surplus dollars to fund education and local government or invest in transportation, if there is going to be a tax cut then it should be an equal amount for all Michigan taxpayers,” Schor said.

Increasing the personal exemption by $100 would benefit everyone that files income taxes. Decreasing the income tax by 0.1 percent would disproportionately help those with greater incomes. A person making $40,000 would have a tax cut of $40 per year, while a person making $400,000 would have a tax cut of $400 per year.

Cutting the income tax 0.1 percent would cost about $200 million. Increasing the personal exemption would cost the state $30 million.

Schor added, “The personal exemption is a true middle class tax cut that won’t break the bank and would also allow for spending on things like education, local services, and transportation,” Schor said. “This proposal ensures a tax break, with plenty of surplus dollars left to ensure that our students, police and fire, and transportation infrastructure can be addressed. Everyone wins with this proposal.”

A similar proposal was passed into law in the 2011-12 session. House Bill 5700 (PA 224 of 2012) increased the personal exemption to $4,000. Schor’s bill would increase the personal exemption to $4,100 starting Jan. 1, 2014.