Michigan Democrat Gov. Whitmer to veto $2.5B tax cut approved by GOP-led Senate

Bill aims to provide tax relief from 40-year high inflation by dropping the personal tax rate from 4.25% to 3.9%.

Updated: March 4, 2022 - 3:32pm

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Michigan Democrat Gov. Gretchen Whitmer is expected to veto $2.5 billion in tax breaks approved by the state's GOP-led Senate.

The bill aims to provide tax relief from 40-year high inflation by dropping the personal tax rate from 4.25% to 3.9%, boosting retirement exemptions, and providing a $500 per child tax credit for those under 19.

Senate Majority Leader Mike Shirkey called the threatened veto "a slap in the face" to Michiganders struggling to afford groceries as inflation bites into their budget and gas rapidly approaches $4 a gallon, especially when the state has a multi-billion-dollar surplus.

"A sure sign someone has been in government too long is if they’re trying to convince you the bureaucracy cannot afford a $2.5 billion tax cut when it has an $8 billion surplus," he said.

The legislation would boost seniors' tax deduction up to $40,000 for individuals and $80,000 for couples and lower the eligibility age from 67 to 62.

If enacted into law by April 1, 2022, the bill would drop state revenue by $2.87 billion in fiscal 2022-23, $2.52 billion in fiscal 2023-24, then from there the revenue loss would grow along with the economy, according to an Senate Fiscal Agency estimate.

Whitmer has said the tax cut would be unsustainable for her proposed $74 billion budget and would require budget cuts in the future.

Tori Sachs, director of the conservative Michigan Freedom Fund, said Whitmer’s priorities don’t represent taxpayers.

"Whitmer gave a single corporation $1 billion, bought the silence of her former department heads with taxpayer dollars, proposed Oprah-style giveaways to distract from her failed record, and now has the gall to tell families struggling to pay for gas that the state can’t afford to lower their taxes," Sachs said in a statement. 

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