New Michigan tax plan doesn’t meet promises

Michiganders were promised permanent relief for all.

While Michiganders were promised permanent tax relief that would help all taxpayers in the state, Gov. Whitmer’s new plan only provides a single check. Under her proposal a 70-year-old working as a Walmart greeter to make ends meet does not get any relief next year, nor does a husband and wife who both teach. The state can afford to provide more relief. 

2022 saw a $9 billion surplus in Michigan – but only $800 million is being returned to Michiganders through this scheme. As people struggle with the cost of living, a rebate of 10% of the surplus seems stingy. As an editorial in the Detroit News said, Whitmer needs to “Forget flimsy rebates” and “lower (the) tax rate” instead. 

There is likely a reason this path was taken. By reducing state revenue by $800 million, it keeps the state below the threshold which would have automatically lowered state income taxes. As the Detroit News explains: “The rate is supposed to drop to 4.05% from the current 4.25% under a provision of a 2015 law that requires the state to reduce the tax levy if revenues exceed the rate of inflation by more than 1.45%.

“That happened in 2022. So the automatic rollback will kick in unless Whitmer backdates expenditures such as the rebates, which she apparently intends to do.”

Some may give her political credit for the rebates, while she is actually avoiding giving Michiganders lasting tax relief. 

Under the governor’s plan, Michigan’s taxpayers will receive $180 refund checks. But not every person will receive one. As the refunds are based on tax return status, married couples filing jointly, for example, will only get one. For the average family, that’s not even enough for a weekly trip to the grocery store. 

“Frankly, when the state is sitting on a $9 billion surplus, we should be doing more than handing out a one-time annual rebate check that equals 49 cents per day,” said Senate Minority Leader Aric Nesbitt, R-Porter Township, of the proposal. 

House Minority Leader Matt Hall, R-Richland Township, doesn’t support the plan, either. “The governor once again refused to say whether she’ll attempt accounting tricks to obstruct the permanent income tax cut that’s headed to every Michigander and small business,” Hall said in a statement. “She either isn’t familiar with the details of her own plan, or she’s trying to hide a secret tax hike from the people.”

Instead of giving people a single check from the government, Whitmer should let Michiganders keep more of what they earn.