Putting Michigan families first by limiting state income taxes

By Anna Heaton

For much of 2017, discussions at the federal level centered around tax reform. After final passage of that legislation and President Trump’s signature in late December, the focus shifted to the states.

One of the most difficult and complex issues in our nation to understand is something that really should be as fair and simple as possible, since it affects all of us.

Gov. Snyder was an accountant before he was a governor, so he understands this stuff really well.

A thorough review of the new federal tax system, compared with Michigan’s State Income Tax Act, shows there will be unintended consequences to Michigan’s taxpayers from the new fed law — an increase of more than $1.5 billion in state income taxes on individuals and small businesses annually.

Why will taxes increase at the state level due to federal reform? Great question. When you do your state taxes, there is a line that asks how many exemptions you claimed on your federal taxes. But the new federal tax law set the personal exemption at zero, which means you’d have to also enter a zero on your state tax return.

Lt. Gov. Brian Calley worked in community banking prior to being a lieutenant governor, so he ALSO understands this tax stuff really well.

Fortunately, we have a solution! Gov. Snyder and Lt. Gov. Calley have worked closely with Michigan’s Dept. of Treasury for the last several weeks to figure out the most fair and simple way to ensure taxpayers hold onto their $1.5 billion and don’t have to pay increased taxes. By clarifying state law, personal exemptions will once again be permitted. So long as this clarification is enacted prior to Jan. 1, 2019, Michigan families won’t see their personal income taxes increase.

To read more about the tax relief already coming to Michigan families in 2018 and 2019, check out this previous post or this easy-to-read graphic.