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  Senate Republicans introduce bill to eliminate Michigan tax credit for working poor
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ContributorRP 
Last EditedRP  Feb 09, 2011 01:35pm
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CategoryProposed Legislation
AuthorPeter Luke
MediaNewspaper - Jackson Citizen Patriot
News DateTuesday, February 8, 2011 11:15:00 PM UTC0:0
DescriptionMichigan’s three-year-old tax credit for the working poor, worth $354 million in the current year, would be scrapped under Senate Republican legislation introduced today. Sponsors said it’s only the first step in what will be broad examination of the billions worth of credits, breaks and exclusions in Michigan’s tax code.

Gov. Rick Snyder, who views eliminating such breaks as less of a tax increase and more of a spending cut, has called for regular examination of tax breaks. He has yet to weigh in on the earned income tax credit and whether its funding could be used to either balance the 2012 budget or help finance the repeal of the Michigan Business Tax. Snyder will unveil his tax and spending plans on Feb. 17.

Kahn said the Michigan earned income tax credit could be just one item in Michigan’s income tax code that Snyder and lawmakers consider. Snyder administration officials told lobbyists Tuesday that the personal income tax could be overhauled along with the business tax. One income tax proposal would keep the income tax rate at 4.35 percent and postpone four years of scheduled reductions back to 3.9 percent from 2012 through 2015. The reductions were part of the 2007 agreement that took the rate up to its current level.

Still another would consider the current exemption of as much as $90,000 in annual retirement income exempt from all state income tax, a treatment for seniors that costs the state treasury in excess of $750 million annually.
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