LANSING, Mich. — State Sen. Michele Hoitenga on Thursday voted against a partisan effort that has been rushed by Democrats to divert billions of tax dollars into corporate handouts and stop an automatic income tax rollback for all Michiganders.
“This bill has been shamefully fast-tracked through the Legislature without hearings, without transparency and with stifled debate,” said Hoitenga, R-Manton. “Its proponents seem to think one-time $180 rebate checks are a fair trade for higher taxes on struggling Michigan families and unchecked corporate welfare. The hard-working people of Michigan need meaningful ongoing relief from historic inflation, not higher taxes and bloated government. This bill will hurt Michiganders for far longer than it will help them.”
Under a 2015 law, an automatic and permanent reduction to the state income tax rate is triggered if revenues in Michigan’s general fund increase past a certain point. The House and Senate fiscal agencies estimate that Michigan was $700 million over the trigger’s threshold in fiscal year 2022, which would reduce the income tax rate from 4.25% to 4.05%.
House Bill 4001, as enrolled, would stop that cut by retroactively moving $800 million from the general fund to a new fund to provide one-time $180 rebates in 2023 and then directing over $1.4 billion over the next three years to the Strategic Outreach and Attraction Reserve (SOAR) Fund removing legislative spending authority. It would also increase the state’s Earned Income Tax Credit (EITC) from 6% to 30% of the federal EITC beginning with the 2022 tax year and phase-in over four years an exemption on certain retirement income from the state income tax, such as public retirement or pension benefits.