Two bills encompassing Governor Rick Snyder’s plan for restructuring Michigan
Lt. Governor Brian Calley appeared before the Committee and stuck to the themes of “simple, fair and efficient” in his description of the Administration’s proposal, which would eliminate the Michigan Business Tax (MBT), implement a 6-percent corporate income tax on C-corporations and broaden the base of the individual income tax through the elimination of exemptions and deductions.
The controversial elimination of the income tax exemption for public and private pensions drew the most attention from the Lt. Governor’s remarks, stating that the current tax system unfairly favors nonworking retirees. Mr. Calley presented multiple, tangible examples of scenarios under the current tax system and the structure proposed by the Snyder Administration such as the retiree making $59,000 that has less tax liability than a working family (including two children) with $49,000 in income.
In related news, Senate Republicans are currently discussing alternatives to some of the funding mechanisms under the Snyder plan as a means to avoid the heat of the pension tax issue or the controversy of the earned income tax credit (EITC) elimination. Alternatives reportedly under consideration include increasing the 6-percent corporate income tax to 7-percent, and/or expanding the base of the tax to more than C-corporations only.