As the late, great sportscaster from Michigan, Dick Enberg, would say: Oh, My!
Has hell frozen over or, more apropos, did Michigan actually experience sunny weather in the 40s today? The political reason for today’s amazement is that one of the state’s most liberal policy groups is offering praise to Gov. Rick Snyder on tax issues.
The Michigan League for Public Policy (MLPP) issued a statement this afternoon saluting Snyder’s proposed alteration to the state tax code so that the tax reform plan approved by the Republican-controlled Congress won’t hit Michiganders with higher taxes in 2018.
Snyder’s quick-fix calls for the continuation of personal exemptions on state income tax forms, one for each household member, that were wiped out by Congress. In doing so, the governor rejected calls by some Republican legislators to instead respond with an income tax cut, which would mostly benefit the wealthy and upper middle class.
“Governor Snyder’s proposal to restore the state personal exemption is the right move and the fairest approach to benefit all taxpayers at all income levels equally,” said MLPP CEO Gilda Jacobs. “This fix is needed quickly to provide Michigan taxpayers some clarity as they plan for the next tax year, and hopefully the Legislature will heed this urgency and embrace this equity.”
A quick look at the background: The GOP tax reform bill signed into law by President Trump last month eliminated the personal exemption – the piece of the federal tax code that led parents for decades to playfully remark that their newborn offered them a new tax deduction. But states like Michigan levied state income taxes based on the adjusted income – minus deductions, credits and exemptions – that was reported by a household on their IRS tax form.
So, no personal exemptions means higher state taxes for many Michigan families.
Within the Snyder administration, state Treasurer Nick Khouri warned last week that the elimination of personal exemptions by Congress – an “unintentional impact on state tax collections” — could lead to a big tax hike for Michiganders. Some economic analysts have pegged the overall increase at $1.4 billion.
The MLPP, which has served as constant critic of the Snyder administration and the Republican Legislature, advocates for progressive taxing and spending policies.
So, of course, CEO Jacobs did not make it through a brief press release without blasting GOP legislators and their priorities:
“… Some Republicans are using this (tax reform) problem to again tout a state income tax rollback that will disproportionately benefit the wealthy. As we asserted all last year, that is the short-sighted, imbalanced and politicized approach — the exact opposite of what Michigan workers and their families really need. We know that 2018 is an election year, but we hope that doesn’t start derailing sound public policy already.”