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Gov. Rick Snyder says tax plan critical for Michigan economy; opponents say it's unfair
|Last Edited||RP Mar 16, 2011 06:29pm|
|Author||Peter Luke |
|Media||Newspaper - Jackson Citizen Patriot|
|News Date||Monday, March 14, 2011 08:55:00 PM UTC0:0|
|Description||Snyder’s proposal applies the personal income tax to public and private pension income, eliminates the Earned Income Tax Credit that low-income senior wage-earners rely on, scraps the $2,300 exemption seniors can claim on their returns and could lessen the value of the Homestead Property Tax Credit for senior households. |
Snyder’s plan generates $1.67 billion in new income tax revenue that finances a $1.73 billion business tax cut. The pension piece alone is worth $900 million. And though Snyder said Monday there would be “tweaks and tuning” as the measure goes through the Legislature, some application of income taxes on pensions will have to survive if the overall plan is to remain intact.
The main theme of Tuesday’s rally is that a billion-plus shift in tax liability from businesses to individuals is unfair. Snyder says if Michigan’s economy is to be competitive, the state needs a better business tax climate. And rather than raising income taxes across the board, the overhaul should address areas in the tax code that now treat retirees quite differently from wage-earners.
As they go forward, lawmakers have to decide whether a business tax cut of that size will indeed promote job creation and if so, whether that alone is worth the political risk of angering reliable senior voters.
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