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House Committee Reports Income Tax Elimination

Feb 17, 2017

This week, the House Tax Policy Committee reported a bill rolling back the state’s income tax rate to zero.  Under the plan reported by the committee, the state’s personal income tax rate would be reduced in 2018 from 4.25% to 3.8%.  Each year thereafter, the tax rate would continue to decline by 0.1% until the income tax is eliminated.  If will take forty years for the tax to be fully eliminated.  The bill sponsor, Speaker Pro Tem Lee Chatfield (R-Levering) has not yet announced where cuts will be made within the state budget to account for the reduction in revenue created by eliminating this tax.  Following the committee vote, Governor Rick Snyder released a statement stating his disappointment at how quickly the bill moved through the committee process and reiterating his previously expressed concerns with the proposal.

The bill was reported by the committee with seven Republican members voting favorably, two Republican members passing, and all four Democratic members voting in opposition.  The bill has been referred to the House floor for further consideration.

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