LANSING, Mich. (AP) — Gov. Gretchen Whitmer vetoed Republicans’ proposal to permanently lower the state income tax, expand deductions for seniors, and reinstate a child tax credit on Friday, claiming it would decrease funding for essential government services.
The probable veto may spark talks between Republican legislative leaders and the Democratic governor, who has advocated for more targeted tax breaks for pensioners and lower-wage employees.
According to neutral analysis, the act “would steal funds from students, police, and communities, and blow a recurrent, multibillion-dollar hole in core government services ranging from public safety to potholes,” she wrote to senators.
Michigan has a $7 billion budget surplus, but her administration claims it is mostly one-time cash that cannot be counted on in future years.
The bill would have reduced the personal income tax rate from 4.25 percent to 3.9 percent, lowered the age for filers to exempt up to $20,000 individually or $40,000 jointly to 62 from 67, allowed an additional exemption for retirement income not covered by the standard senior deduction, and established a $500 per-child tax credit. It would have saved the taxpayers $2.5 billion every year.
Republicans accused Whitmer, who is running for reelection, of passing up an opportunity to assist residents who are struggling with rising inflation.
“This plan would have reduced taxes for every single taxpayer in the state while also providing additional assistance to seniors and families with children.” “It fulfilled everything the governor promised,” House Speaker Jason Wentworth remarked. “But, in the end, she just couldn’t bring herself to return that money to the people who deserved it.”
Whitmer has proposed increasing Michigan’s earned income tax credit to 20% of the federal credit, up from 6%, and gradually erasing a 2011 change that cut a retirement income exemption for persons born after 1945.
“Let us concentrate on getting things done,” she replied.
She also promised to veto legislation that would suspend the state’s per-gallon gasoline tax for six months, instead proposing to freeze the sales tax on gasoline.