Michigan Senate votes to cut income, corporate tax rates

Posted at 12:54 PM, Feb 15, 2022
and last updated 2022-02-15 12:54:44-05

(AP) — Republicans who control the Michigan Senate voted Tuesday for a $2.5 billion annual tax cut, passing a bill that would reduce income and corporate rates and let taxpayers claim a credit for their children.

The step came less than a week after Democratic Gov. Gretchen Whitmer formally proposed less sweeping tax breaks targeted at retirees and lower-wage earners.

Citing a multibillion-dollar budget surplus, Republicans said it is time to return money to people hurt by the pandemic and high inflation and to also keep the state's business climate competitive. Democrats countered that the legislation would help corporations that are banking record profits from higher prices — not frontline workers.

The bill would cut the individual income tax rate from 4.25% to 3.9% and the corporate income tax rate from 6% to 3.9%. It would restore a $500 per-child tax credit and allow people ages 67 and older deduct more of their income from taxation.

The legislation, approved 22-16 on party lines, next goes to the GOP-led House.