21 March 2013

Whitmer: Snyder's policies constitute largest tax increase in Mich. history

Story originally appeared on the Detroit News.

Lansing — Senate Democrats said Tuesday that 51 percent of Michigan's residents are being hit with tax increases for the first time this tax season as a result of policy changes made by Gov. Rick Snyder and the Republican legislative majority during the past two years.

Democratic Leader Gretchen Whitmer, D-East Lansing, said Snyder's budget-balancing policies "constitute the largest tax increase on individuals in Michigan history."

Under Snyder proposals adopted by the Legislature, business taxes were trimmed by $1.8 billion; the state income tax was expanded to include previously exempted pension income; and the state tax credit for low-income working families was reduced to 6 percent of the federal amount, down from 20 percent.

Also eliminated were a special $2,300 income tax exemption for seniors, a $600-per-child emption for families and an exemption for unemployment benefits greater then 50 percent of adjusted gross income. The homestead property tax exemption was reduced.

Snyder and Republican allies have said the budget strategies were necessary to make the state competitive, wipe out a billion-dollar structural budget deficit and create a better jobs climate in Michigan.

On the earned income tax credit, Snyder noted two years ago that most of the tax relief for low-income families comes from the federal tax credit. The GOP trimmed the tax credit as part of balancing the budget.

Republicans also have argued that the state's current EITC at 6 percent is more than what is offered in 31 other states.
Senate Democrats remain undeterred. The net result, Whitmer said, is that those with annual salaries above $334,000 a year pay $7 in added state income tax, while those making less than $17,000 a year pay an added $101.

Pamela Kreiner, a Lansing working mother of two who attended the Democratic press conference, said she was "in shock" to discover how much less she will get back from her state tax return this year compared to prior years. She said she can pay her bills but will have to cut back on discretionary spending. She said she wonders how less-fortunate people can handle the higher taxes.

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