PROOS: Supporting tax relief as state revenues increase
Published 11:05 pm Tuesday, January 16, 2018
As Michigan’s economy continues to grow, create jobs and generate revenue to the state, we owe it to our hardworking residents and small businesses to provide them with well-earned tax relief.
I am a strong supporter of new Senate legislation that will ensure that southwest Michigan taxpayers can continue claiming the personal exemption on their state taxes while also giving them an additional tax break that is responsible and affordable.
The federal Tax Cuts and Jobs Act signed by President Trump in December 2017 simplifies the code, lowers tax rates, doubles the standard deduction and increases family tax credits.
However, in streamlining the exemption process, it effectively ends the federal personal exemption. Since the state personal exemption is based on the federal return, without a revision to state law, Michigan taxpayers would no longer be able to claim personal exemptions on their state taxes.
Senate Bill 748 would make the necessary changes to maintain the state personal exemption and also boost the exemption by an additional $500 to $4,800 by 2021. Currently, the state personal exemption is scheduled to increase from $4,000 to $4,300 over the next three years.
This reform will help prevent a $1.5 billion tax hike on Michigan families and also put more money back into their pocketbooks.
State fiscal leaders from the Senate, House and executive branch and economists from across the state recently met for the annual January Consensus Revenue Estimating Conference. Their economic and tax revenue projections are used to draft budget proposals for the next fiscal year.
For the current 2018 fiscal year, state fiscal officials forecasted that Michigan will have $571.7 million more in total revenue than budgeted for last summer.
This significant budget surplus offers us a chance to invest in key priorities and reduce the burden on all Michigan taxpayers.
As a member of the Senate finance and appropriations committees, I look forward to helping enact this important tax relief as we begin the new state budget process.