Michigan House committee approves Chatfield income tax rollback, phase out
Taxpayers would save $1B by 2019
February 15, 2016
A landmark proposal to give every Michigan worker income tax relief was approved by a House committee today in Lansing.
The plan would lower the state’s personal income tax rate from the current 4.25 percent to 3.9 percent in 2018, resulting in a savings of almost $1 billion a year by 2019. The tax rate would continue to drop 0.1 percent each year afterward until the income tax is eliminated, providing more relief for workers each year.
“A strong economy begins in our homes,” said Rep. Lee Chatfield of Levering, the bill sponsor. “When Michigan families have more of their own income to spend or save, the entire state economy benefits. This simply is the right thing to do and the right time to do it.”
Reducing the income tax rate to 3.9 percent would fulfill a promise originally made in 2007, when a series of tax changes included a planned lowering of the personal income tax rate. The reduction to 3.9 percent, originally scheduled for 2015, never materialized due to tax structure changes approved in 2011.
The legislation approved today by the House Tax Policy Committee would restore that promise. The bill now advances to the House floor for consideration.