State Income Tax Reduction Introduced

Senate Finance Committee Chairman Jack Brandenburg (R-Harrison Township) introduced legislation this week to return Michigan’s individual income tax rate to 3.9 percent by 2017. Senate Bill 906 was referred to Sen. Brandenburg’s Committee where he has identified it as a priority. The measure received 10 Republican and 1 Democratic co-sponsor.

In 2007, the income tax rate was raised from 3.9 to 4.35 percent with a reduction schedule. During the widespread tax reform of 2011, the reduction schedule was altered to delay the roll-back to 4.25 until January of 2013, and then lock the rate there.

Under Senator Brandenburg’s bill, the rate would decrease to 4.1 percent in 2014, to 4.05 percent in 2015, to 3.95 percent in 2016 and finally to the pre-2007 rate of 3.9 percent in 2017. Estimates are that each 0.1 percent will generate $175 million in revenue.

Senate Majority Leader Randy Richardville (R-Monroe) has indicated his preference to see what the numbers look like at the May Consensus Revenue Estimating Conference before making decisions on the proposal.

posted by PAA Online , Friday, January 27, 2012 10:50 AM
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