Legislature’s plan returns more than $2.5 billion to people who need it most
State Rep. Rodney Wakeman today voted to provide much-needed tax relief for families, seniors, workers and veterans in Michigan.
Wakeman, of Frankenmuth, said the more than $2.5 billion tax cut plan – made possible by an unprecedented state revenue surplus – will put more money in people’s wallets at a time when everyone is struggling under the weight of historic inflation rates.
“Every day, I hear from people who are worried about continuing to pay their bills and put food on the table as the cost of gas, groceries and other expenses continues to rise,” Wakeman said. “I am listening to their concerns and taking action to help people keep more of their hard-earned money in their own pockets.”
Highlights of the plan include:
- Income tax cuts for Michigan workers. The Legislature’s plan lowers the individual income tax rate from 4.25% to 4% and increases the personal income tax exemption by $1,800 for single filers and $3,600 for joint filers.
- Relief for working families. Families would be eligible for a new $500 nonrefundable tax credit for each dependent 18 years old or younger. The state Earned Income Tax Credit, which offers savings for lower-income families and individuals, would increase from 6% to 20% of eligible income — a change the governor has previously supported. Restoring the state Earned Income Tax Credit to 20% of eligible income will deliver an average state and federal refund of nearly $3,000 to more than 730,000 working people.
- Additional tax exemptions for seniors. Residents age 67 and older who may currently deduct $20,000 of income individually or $40,000 jointly would be eligible for an increase of $1,800 or $3,600, respectively, with future increases automatically adjusted for inflation.
- Expanded benefits for veterans. Under current state law, a veteran with a permanent and total disability resulting from military service is exempted from paying property tax on their home. The plan would also apply this exemption to an eligible veteran’s surviving spouse and a spouse of a veteran killed in action. Veterans with a disability determined to be between 50% and 100% would be eligible for a property tax credit up to $2,000. Finally, the state will reimburse local governments for the veteran exemptions, preserving local funding for essential services.
The bulk of the tax plan, contained in House Bill 4568, was approved by the state House and Senate today and now advances to the governor for consideration. The remainder of the plan in Senate Bill 784 was approved by the Senate and is expected to pass the House early next week.
Twice this year, the Legislature has sent tax relief proposals to the governor only to see them vetoed. Wakeman urged the governor to sign the plan and provide much-needed relief to residents.
State Rep. Rodney Wakeman this morning voted for a state budget plan that prioritizes the everyday needs of students, families and communities while leaving room for billions of dollars in potential tax relief to help address inflation.