LANSING, Mich. (WLUC) – Gov. Gretchen Whitmer and state Democratic leaders rolled out their tax break plan Monday morning.
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Dubbed the ‘Lowering MI Costs Plan’, it would roll back the retirement tax, boost a tax credit and deliver inflation relief checks to every taxpayer. It comes as the state’s budget surplus is projected to reach $9.2 billion by next fall.
Whitmer’s administration says it would be the largest tax break to Michigan residents in decades.
Inflation Relief Checks
The plan will deliver $180 inflation relief checks to every Michigan tax filer, providing immediate relief by putting money back in pockets. Ensures everyone receives some relief and builds on relief for working families and seniors.
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“We know prices are up and everyone is feeling the squeeze. Those extra cents per item at the grocery store add up and it affects all Michiganders regardless of income,” said Senate Majority Leader Winnie Brinks.
Retirement Tax
The plan phases out the retirement tax over four years and ultimately puts an average of $1,000 back in the pockets of 500,000 households. Lowering MI Costs will equalize the exemption on both public and private pensions.
Working Families Tax Credit
The plan quintuples the Michigan Working Families Tax Credit match of the federal Earned Income Tax Credit (EITC) to 30%, up from 6%. It delivers an average combined tax refund of $3,150 to 700,000 families, directly impacting nearly one million kids—almost half the kids in Michigan. Lowering MI Costs makes this boost retroactive for tax year 2022, meaning families will get more money in their pockets this year.
“The #1 concern for Michiganders right now is costs,” said Governor Whitmer in a statement. “Our Lowering MI Costs plan puts money back in people’s pockets by rolling back the retirement tax, quintupling the Working Families Tax Credit, and delivering inflation relief checks to every taxpayer. Getting this done will help people pay the bills and put food on the table as inflation impacts their monthly budgets. I am proud that we are hustling to get this done and deliver real, immediate relief to Michiganders.”
“House Democrats heard from Michiganders across our state that they want us to repeal the retirement tax,” said Speaker Joe Tate in a statement. “Their priorities are our priorities. With the passage of this plan, we are making good on our promise to the people of Michigan. Lowering MI Costs gives retirees back their hard-earned money, puts dollars into the hands of working families, and delivers much-needed relief from inflation for people across our state. This is meaningful relief at a time when Michiganders truly need it. I am proud of my colleagues in both chambers and the governor for her leadership to get this done.”
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“This announcement is a tremendously exciting moment for Michigan,” Brinks said. “It includes key promises that Democrats have been talking about in coffee shops and townhalls and at our neighbors’ doors for years. It reflects what we have been hearing from Michiganders and what we have been working to deliver: lowering costs, combating the pinch of inflation, and providing real, immediate relief for the people of our state.”
Meanwhile, Republican State Representative Greg Markkanen would like to see an increased effort for tax relief.
“I think we need tax relief across the board not only for the public sector but also with the private sector. We would like to come together with the governor’s office and look across the aisle to work out a plan that gives all Michigander’s tax relief, not just a certain segment of the population,” Markkanen said.
Markkanen said more tax relief would benefit residents of the U.P.
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“We have higher costs up here; we have people who travel many miles for work and gas prices are still really high. People need that tax relief. Just issuing someone a check is kind of a half-baked plan in my opinion,” Markkanen said.
The Lowering MI Costs Plan needs to be approved by the Democratic-led House and Senate, which could happen this week.
