LansingStateJournal.com
Written by: Tim Martin
Arpil 28, 2011 12:41 A.M.
Michigan tax plan clears first hurdle; House panel OKs Snyder's restructuring
Republican Gov. Rick Snyder's sweeping plan to cut business taxes, eliminate or reduce tax exemptions for some retirement income and make other significant changes cleared a preliminary hurdle Wednesday in the Michigan House.
The GOP-led House Tax Policy Committee approved bills included in the tax plan along mostly party-line votes. The full House could vote on the proposal as early as today.
Republican leaders have not guaranteed the plan will pass, although the GOP has majorities in both the House and Senate. There are lingering concerns about aspects of the proposal, including measures related to ending or reducing tax exemptions for some seniors.
Snyder has significantly scaled down his original proposal, which would have raised an estimated $900 million by ending tax exemptions for most retirement income. Snyder's revised plan calls for raising about $300 million through retiree income tax changes. Those 67 and older as of Jan. 1, 2012 would continue to get the same tax breaks they get now, while exemptions would be reduced for those ages 60 to 66.
Republicans appear to be on board with Snyder's plan to cut business taxes by roughly $1 billion next fiscal year and $1.7 billion the year after. The Michigan Business Tax would be replaced with a 6 percent income tax applied to corporations with shareholders. Many tax exemptions would be eliminated or phased out.--------------------------------------
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