Democrats unveiled major tax overhaul: A guide to their proposals

[marmar]

(Detroit Free Press) Gov. Gretchen Whitmer and Democratic legislative leaders unveiled a new plan to send $180 checks to Michigan taxpayers. The payments are part of a larger plan proposing permanent tax cuts that target low-income earners and retirees.

If state lawmakers approve the changes, they would mark the biggest transformation of Michigan's tax system in more than a decade. Here's a look at the proposals:

Expanding the "Working Families Tax Credit"

The federal Earned Income Tax Credit (EITC) benefits low-income workers by essentially subsidizing their wages. Like many states, Michigan has a state EITC — what Whitmer calls the Working Families Tax Credit — set at a share of the federal credit. At 6%, Michigan's EITC is among the least generous in the country.

In the 2019 tax year, about 738,380 Michigan families received an average credit of $150, according to the Michigan League for Public Policy. That could increase to an average credit of $750 under Democrats' plan to increase the state EITC to 30% of the federal credit beginning in the 2022 tax year.

....(snip)....

Retirement tax

For years, Whitmer has called for the repeal of pension tax changes that were made law in 2012 under former GOP Gov. Rick Snyder.

Whitmer said Monday the latest proposal would provide equal exemptions for a certain level of retirement income, whether it comes from public or private retirement plans. That's a new feature and an apparent effort to win support from Republicans, who complained earlier Democratic proposals would favor public pensioners over private ones. .............(more)

https://www.freep.com/story/news/politics/2023/02/07/whitmer-plan-to-cut-taxes-for-seniors-low-income-earners/69876966007/